Correlation Between Airbus Group and Millenium Hotels
Can any of the company-specific risk be diversified away by investing in both Airbus Group and Millenium Hotels 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 Millenium Hotels 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 Millenium Hotels Real, you can compare the effects of market volatilities on Airbus Group and Millenium Hotels 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 Millenium Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Millenium Hotels.
Diversification Opportunities for Airbus Group and Millenium Hotels
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airbus and Millenium is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Millenium Hotels Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millenium Hotels Real 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 Millenium Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millenium Hotels Real has no effect on the direction of Airbus Group i.e., Airbus Group and Millenium Hotels go up and down completely randomly.
Pair Corralation between Airbus Group and Millenium Hotels
Assuming the 90 days trading horizon Airbus Group SE is expected to generate 1.04 times more return on investment than Millenium Hotels. However, Airbus Group is 1.04 times more volatile than Millenium Hotels Real. It trades about 0.28 of its potential returns per unit of risk. Millenium Hotels Real is currently generating about -0.18 per unit of risk. If you would invest 15,400 in Airbus Group SE on October 23, 2024 and sell it today you would earn a total of 936.00 from holding Airbus Group SE or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus Group SE vs. Millenium Hotels Real
Performance |
| Timeline |
| Airbus Group SE |
| Millenium Hotels Real |
Airbus Group and Millenium Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and Millenium Hotels
The main advantage of trading using opposite Airbus Group and Millenium Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, Millenium Hotels 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 Millenium Hotels will offset losses from the drop in Millenium Hotels' long position.| Airbus Group vs. Hispanotels Inversiones SOCIMI | Airbus Group vs. Cellnex Telecom SA | Airbus Group vs. Tier1 Technology SA | Airbus Group vs. Azaria Rental SOCIMI |
| Millenium Hotels vs. Airbus Group SE | Millenium Hotels vs. Industria de Diseno | Millenium Hotels vs. Vale SA | Millenium Hotels vs. Iberdrola SA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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