Correlation Between Airbus Group and Tecnicas Reunidas
Can any of the company-specific risk be diversified away by investing in both Airbus Group and Tecnicas Reunidas 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 Tecnicas Reunidas 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 Tecnicas Reunidas, you can compare the effects of market volatilities on Airbus Group and Tecnicas Reunidas 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 Tecnicas Reunidas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Tecnicas Reunidas.
Diversification Opportunities for Airbus Group and Tecnicas Reunidas
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airbus and Tecnicas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Tecnicas Reunidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecnicas Reunidas 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 Tecnicas Reunidas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecnicas Reunidas has no effect on the direction of Airbus Group i.e., Airbus Group and Tecnicas Reunidas go up and down completely randomly.
Pair Corralation between Airbus Group and Tecnicas Reunidas
Assuming the 90 days trading horizon Airbus Group SE is expected to under-perform the Tecnicas Reunidas. But the stock apears to be less risky and, when comparing its historical volatility, Airbus Group SE is 1.38 times less risky than Tecnicas Reunidas. The stock trades about -0.05 of its potential returns per unit of risk. The Tecnicas Reunidas is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,370 in Tecnicas Reunidas on November 28, 2024 and sell it today you would earn a total of 167.00 from holding Tecnicas Reunidas or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus Group SE vs. Tecnicas Reunidas
Performance |
| Timeline |
| Airbus Group SE |
| Tecnicas Reunidas |
Airbus Group and Tecnicas Reunidas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and Tecnicas Reunidas
The main advantage of trading using opposite Airbus Group and Tecnicas Reunidas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, Tecnicas Reunidas 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 Tecnicas Reunidas will offset losses from the drop in Tecnicas Reunidas' long position.| Airbus Group vs. Arrienda Rental Properties | Airbus Group vs. Ebro Foods | Airbus Group vs. Vytrus Biotech SA | Airbus Group vs. Azaria Rental SOCIMI |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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