Correlation Between ASSOC BR and Airbus SE
Can any of the company-specific risk be diversified away by investing in both ASSOC BR 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 ASSOC BR and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSOC BR FOODS and Airbus SE, you can compare the effects of market volatilities on ASSOC BR 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 ASSOC BR with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and Airbus SE.
Diversification Opportunities for ASSOC BR and Airbus SE
Excellent diversification
The 3 months correlation between ASSOC and Airbus is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and ASSOC BR 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 ASSOC BR FOODS 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 ASSOC BR i.e., ASSOC BR and Airbus SE go up and down completely randomly.
Pair Corralation between ASSOC BR and Airbus SE
Assuming the 90 days trading horizon ASSOC BR FOODS is expected to under-perform the Airbus SE. In addition to that, ASSOC BR is 1.14 times more volatile than Airbus SE. It trades about -0.08 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.11 per unit of volatility. If you would invest 13,220 in Airbus SE on October 21, 2024 and sell it today you would earn a total of 2,860 from holding Airbus SE or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASSOC BR FOODS vs. Airbus SE
Performance |
| Timeline |
| ASSOC BR FOODS |
| Airbus SE |
ASSOC BR and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSOC BR and Airbus SE
The main advantage of trading using opposite ASSOC BR and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR 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.| ASSOC BR vs. QBE Insurance Group | ASSOC BR vs. Safety Insurance Group | ASSOC BR vs. Universal Insurance Holdings | ASSOC BR vs. Alaska Air Group |
| Airbus SE vs. Raytheon Technologies Corp | Airbus SE vs. The Boeing | Airbus SE vs. Lockheed Martin | Airbus SE vs. The Boeing |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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