Correlation Between 210385AB6 and Grupo Aeroportuario

Can any of the company-specific risk be diversified away by investing in both 210385AB6 and Grupo Aeroportuario at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 210385AB6 and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CEG 56 01 MAR 28 and Grupo Aeroportuario del, you can compare the effects of market volatilities on 210385AB6 and Grupo Aeroportuario and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 210385AB6 with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of 210385AB6 and Grupo Aeroportuario.

Diversification Opportunities for 210385AB6 and Grupo Aeroportuario

0.64

Correlation Coefficient

210385AB6  Grupo Aeroportuario

Poor diversification

The 3 months correlation between 210385AB6 and Grupo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CEG 56 01 MAR 28 and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and 210385AB6 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CEG 56 01 MAR 28 are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of 210385AB6 i.e., 210385AB6 and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between 210385AB6 and Grupo Aeroportuario

Assuming the 90 days trading horizon CEG 56 01 MAR 28 is expected to generate 0.33 times more return on investment than Grupo Aeroportuario. However, CEG 56 01 MAR 28 is 3.04 times less risky than Grupo Aeroportuario. It trades about -0.12 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about -0.06 per unit of risk. If you would invest  10,384  in CEG 56 01 MAR 28 on October 8, 2024 and sell it today you would lose (393.00) from holding CEG 56 01 MAR 28 or give up 3.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

CEG 56 01 MAR 28  vs.  Grupo Aeroportuario del

CEG 56 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEG 56 01 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 210385AB6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grupo Aeroportuario del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grupo Aeroportuario is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 210385AB6 and Grupo Aeroportuario

The main advantage of trading using opposite 210385AB6 and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 210385AB6 position performs unexpectedly, Grupo Aeroportuario can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.

The idea behind CEG 56 01 MAR 28 and Grupo Aeroportuario del pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.