Correlation Between Airbus SE and GameStop Corp

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Can any of the company-specific risk be diversified away by investing in both Airbus SE and GameStop 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 Airbus SE and GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and GameStop Corp, you can compare the effects of market volatilities on Airbus SE and GameStop 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 Airbus SE with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and GameStop Corp.

Diversification Opportunities for Airbus SE and GameStop Corp

AirbusGameStopDiversified AwayAirbusGameStopDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Airbus and GameStop is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Airbus SE 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 SE are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Airbus SE i.e., Airbus SE and GameStop Corp go up and down completely randomly.

Pair Corralation between Airbus SE and GameStop Corp

Assuming the 90 days trading horizon Airbus SE is expected to generate 3.05 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, Airbus SE is 2.1 times less risky than GameStop Corp. It trades about 0.11 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,904  in GameStop Corp on October 21, 2024 and sell it today you would earn a total of  768.00  from holding GameStop Corp or generate 40.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Airbus SE  vs.  GameStop Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 10203040506070
JavaScript chart by amCharts 3.21.15AIRA GS2C
       Timeline  
Airbus SE 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Airbus SE reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan34353637383940
GameStop Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GameStop Corp reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2022242628303234

Airbus SE and GameStop Corp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.9-4.42-2.94-1.460.01.593.24.816.42 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15AIRA GS2C
       Returns  

Pair Trading with Airbus SE and GameStop Corp

The main advantage of trading using opposite Airbus SE and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, GameStop 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.
The idea behind Airbus SE and GameStop 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.
Check out your portfolio center.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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