Correlation Between Airbus Group and Graines Voltz

Can any of the company-specific risk be diversified away by investing in both Airbus Group and Graines Voltz 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 Graines Voltz 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 Graines Voltz SA, you can compare the effects of market volatilities on Airbus Group and Graines Voltz 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 Graines Voltz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Graines Voltz.

Diversification Opportunities for Airbus Group and Graines Voltz

-0.63

Correlation Coefficient

Airbus Group  Graines Voltz

Excellent diversification

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

Pair Corralation between Airbus Group and Graines Voltz

Assuming the 90 days trading horizon Airbus Group SE is expected to generate 0.6 times more return on investment than Graines Voltz. However, Airbus Group SE is 1.66 times less risky than Graines Voltz. It trades about 0.08 of its potential returns per unit of risk. Graines Voltz SA is currently generating about -0.02 per unit of risk. If you would invest  15,438  in Airbus Group SE on December 30, 2024 and sell it today you would earn a total of  1,188  from holding Airbus Group SE or generate 7.7% return on investment over 90 days.

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

Airbus Group SE  vs.  Graines Voltz 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. Despite somewhat weak basic indicators, Airbus Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Graines Voltz SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Airbus Group and Graines Voltz

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

The idea behind Airbus Group SE and Graines Voltz 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.