Correlation Between Airbus SE and Citycon Oyj
Can any of the company-specific risk be diversified away by investing in both Airbus SE and Citycon Oyj 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 Citycon Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and Citycon Oyj, you can compare the effects of market volatilities on Airbus SE and Citycon Oyj 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 Citycon Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and Citycon Oyj.
Diversification Opportunities for Airbus SE and Citycon Oyj
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Airbus and Citycon is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj 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 Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of Airbus SE i.e., Airbus SE and Citycon Oyj go up and down completely randomly.
Pair Corralation between Airbus SE and Citycon Oyj
Assuming the 90 days trading horizon Airbus SE is expected to generate 1.03 times more return on investment than Citycon Oyj. However, Airbus SE is 1.03 times more volatile than Citycon Oyj. It trades about 0.11 of its potential returns per unit of risk. Citycon Oyj is currently generating about -0.06 per unit of risk. If you would invest 3,240 in Airbus SE on October 26, 2024 and sell it today you would earn a total of 840.00 from holding Airbus SE or generate 25.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.2% |
Values | Daily Returns |
Airbus SE vs. Citycon Oyj
Performance |
Timeline |
Airbus SE |
Citycon Oyj |
Airbus SE and Citycon Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Airbus SE and Citycon Oyj
The main advantage of trading using opposite Airbus SE and Citycon Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, Citycon Oyj 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 Citycon Oyj will offset losses from the drop in Citycon Oyj's long position.Airbus SE vs. LPKF Laser Electronics | Airbus SE vs. Yanzhou Coal Mining | Airbus SE vs. Meiko Electronics Co | Airbus SE vs. Electronic Arts |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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