Correlation Between Airbus Group and Vytrus Biotech

Can any of the company-specific risk be diversified away by investing in both Airbus Group and Vytrus Biotech 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 Airbus Group and Vytrus Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Airbus Group SE and Vytrus Biotech SA, you can compare the effects of market volatilities on Airbus Group and Vytrus Biotech 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 Airbus Group with a short position of Vytrus Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Vytrus Biotech.

Diversification Opportunities for Airbus Group and Vytrus Biotech

0.63

Correlation Coefficient

Airbus Group  Vytrus Biotech

Poor diversification

The 3 months correlation between Airbus and Vytrus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Vytrus Biotech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vytrus Biotech SA and Airbus Group 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 Airbus Group SE are associated (or correlated) with Vytrus Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vytrus Biotech SA has no effect on the direction of Airbus Group i.e., Airbus Group and Vytrus Biotech go up and down completely randomly.

Pair Corralation between Airbus Group and Vytrus Biotech

Assuming the 90 days trading horizon Airbus Group is expected to generate 3.01 times less return on investment than Vytrus Biotech. In addition to that, Airbus Group is 1.05 times more volatile than Vytrus Biotech SA. It trades about 0.08 of its total potential returns per unit of risk. Vytrus Biotech SA is currently generating about 0.25 per unit of volatility. If you would invest  216.00  in Vytrus Biotech SA on December 29, 2024 and sell it today you would earn a total of  60.00  from holding Vytrus Biotech SA or generate 27.78% return on investment over 90 days.

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

Airbus Group SE  vs.  Vytrus Biotech SA

Airbus Group SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus Group SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Airbus Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Vytrus Biotech SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vytrus Biotech SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Vytrus Biotech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airbus Group and Vytrus Biotech

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

The idea behind Airbus Group SE and Vytrus Biotech SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.