Correlation Between Grupo Aeroportuario and PVH Corp

Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and PVH Corp 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 Grupo Aeroportuario and PVH Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Aeroportuario del and PVH Corp, you can compare the effects of market volatilities on Grupo Aeroportuario and PVH Corp 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 Grupo Aeroportuario with a short position of PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and PVH Corp.

Diversification Opportunities for Grupo Aeroportuario and PVH Corp

-0.62

Correlation Coefficient

Grupo Aeroportuario  PVH Corp

Excellent diversification

The 3 months correlation between Grupo and PVH is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp and Grupo Aeroportuario 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 Grupo Aeroportuario del are associated (or correlated) with PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and PVH Corp go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and PVH Corp

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 1.21 times more return on investment than PVH Corp. However, Grupo Aeroportuario is 1.21 times more volatile than PVH Corp. It trades about 0.15 of its potential returns per unit of risk. PVH Corp is currently generating about 0.06 per unit of risk. If you would invest  32,238  in Grupo Aeroportuario del on February 2, 2024 and sell it today you would earn a total of  2,239  from holding Grupo Aeroportuario del or generate 6.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grupo Aeroportuario del  vs.  PVH Corp

Grupo Aeroportuario del

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Grupo Aeroportuario reported solid returns over the last few months and may actually be approaching a breakup point.

PVH Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PVH Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PVH Corp is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Grupo Aeroportuario and PVH Corp

The main advantage of trading using opposite Grupo Aeroportuario and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp's long position.

The idea behind Grupo Aeroportuario del and PVH Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.