Correlation Between ANT and Airbus SE

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

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

Diversification Opportunities for ANT and Airbus SE

-0.29

Correlation Coefficient

ANT  Airbus SE

Very good diversification

The 3 months correlation between ANT and Airbus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and ANT 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 ANT are associated (or correlated) with Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of ANT i.e., ANT and Airbus SE go up and down completely randomly.

Pair Corralation between ANT and Airbus SE

Assuming the 90 days trading horizon ANT is expected to generate 40.04 times more return on investment than Airbus SE. However, ANT is 40.04 times more volatile than Airbus SE. It trades about 0.1 of its potential returns per unit of risk. Airbus SE is currently generating about 0.06 per unit of risk. If you would invest  309.00  in ANT on October 25, 2024 and sell it today you would lose (162.00) from holding ANT or give up 52.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.4%
Values	Daily Returns

ANT  vs.  Airbus SE

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Airbus SE

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Airbus SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Airbus SE

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

The idea behind ANT and Airbus SE 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.