Correlation Between Airbus Group and Airbus Group

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

Diversification Opportunities for Airbus Group and Airbus Group

0.91

Correlation Coefficient

Airbus Group  Airbus Group

Almost no diversification

The 3 months correlation between Airbus and Airbus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Airbus Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus Group NV 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 Airbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus Group NV has no effect on the direction of Airbus Group i.e., Airbus Group and Airbus Group go up and down completely randomly.

Pair Corralation between Airbus Group and Airbus Group

Assuming the 90 days horizon Airbus Group SE is expected to generate 1.05 times more return on investment than Airbus Group. However, Airbus Group is 1.05 times more volatile than Airbus Group NV. It trades about 0.1 of its potential returns per unit of risk. Airbus Group NV is currently generating about 0.1 per unit of risk. If you would invest  16,305  in Airbus Group SE on December 29, 2024 and sell it today you would earn a total of  2,033  from holding Airbus Group SE or generate 12.47% return on investment over 90 days.

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

Airbus Group SE  vs.  Airbus Group NV

Airbus Group SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus Group SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Airbus Group reported solid returns over the last few months and may actually be approaching a breakup point.

Airbus Group NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus Group NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Airbus Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airbus Group and Airbus Group

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

The idea behind Airbus Group SE and Airbus Group NV 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.