Correlation Between Intel and Airbus SE

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

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

Diversification Opportunities for Intel and Airbus SE

-0.1

Correlation Coefficient

Intel  Airbus SE

Good diversification

The 3 months correlation between Intel and Airbus is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and Intel 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 Intel 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 Intel i.e., Intel and Airbus SE go up and down completely randomly.

Pair Corralation between Intel and Airbus SE

Assuming the 90 days trading horizon Intel is expected to under-perform the Airbus SE. In addition to that, Intel is 2.72 times more volatile than Airbus SE. It trades about -0.02 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.13 per unit of volatility. If you would invest  15,056  in Airbus SE on December 2, 2024 and sell it today you would earn a total of  1,512  from holding Airbus SE or generate 10.04% return on investment over 90 days.

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

Intel  vs.  Airbus SE

Intel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Intel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Airbus SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Airbus SE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intel and Airbus SE

The main advantage of trading using opposite Intel and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.