Correlation Between WT OFFSHORE and Airbus SE

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

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

Diversification Opportunities for WT OFFSHORE and Airbus SE

-0.34

Correlation Coefficient

WT OFFSHORE  Airbus SE

Very good diversification

The 3 months correlation between UWV and Airbus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE i.e., WT OFFSHORE and Airbus SE go up and down completely randomly.

Pair Corralation between WT OFFSHORE and Airbus SE

Assuming the 90 days trading horizon WT OFFSHORE is expected to generate 1.84 times less return on investment than Airbus SE. In addition to that, WT OFFSHORE is 2.14 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 0.09 per unit of volatility. If you would invest  15,482  in Airbus SE on December 21, 2024 and sell it today you would earn a total of  1,290  from holding Airbus SE or generate 8.33% return on investment over 90 days.

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

WT OFFSHORE  vs.  Airbus SE

WT OFFSHORE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WT OFFSHORE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, WT OFFSHORE is not utilizing all of its potentials. The newest 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 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat 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 WT OFFSHORE and Airbus SE

The main advantage of trading using opposite WT OFFSHORE and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE 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 WT OFFSHORE 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.