Correlation Between Allegiant Travel and Grupo Aeroportuario

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

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

Diversification Opportunities for Allegiant Travel and Grupo Aeroportuario

-0.18

Correlation Coefficient

Allegiant Travel  Grupo Aeroportuario

Good diversification

The 3 months correlation between Allegiant and Grupo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel 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 Allegiant Travel 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 Allegiant Travel 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 Allegiant Travel i.e., Allegiant Travel and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between Allegiant Travel and Grupo Aeroportuario

Given the investment horizon of 90 days Allegiant Travel is expected to under-perform the Grupo Aeroportuario. In addition to that, Allegiant Travel is 2.74 times more volatile than Grupo Aeroportuario del. It trades about 0.0 of its total potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.15 per unit of volatility. If you would invest  9,413  in Grupo Aeroportuario del on May 7, 2025 and sell it today you would earn a total of  1,219  from holding Grupo Aeroportuario del or generate 12.95% return on investment over 90 days.

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

Allegiant Travel  vs.  Grupo Aeroportuario del

Allegiant Travel

Risk-Adjusted Performance

Weakest

Over the last 90 days Allegiant Travel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Allegiant Travel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Grupo Aeroportuario del

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Grupo Aeroportuario sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allegiant Travel and Grupo Aeroportuario

The main advantage of trading using opposite Allegiant Travel and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel 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 Allegiant Travel 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.