Correlation Between Airbus SE and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Airbus SE and CDN IMPERIAL 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 SE and CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Airbus SE and CDN IMPERIAL 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 SE with a short position of CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and CDN IMPERIAL.
Diversification Opportunities for Airbus SE and CDN IMPERIAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Airbus and CDN is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK and Airbus SE 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 SE are associated (or correlated) with CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Airbus SE i.e., Airbus SE and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Airbus SE and CDN IMPERIAL
Assuming the 90 days trading horizon Airbus SE is expected to generate 1.11 times more return on investment than CDN IMPERIAL. However, Airbus SE is 1.11 times more volatile than CDN IMPERIAL BANK. It trades about 0.39 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.21 per unit of risk. If you would invest 14,008 in Airbus SE on September 13, 2024 and sell it today you would earn a total of 1,622 from holding Airbus SE or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus SE vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Airbus SE |
| CDN IMPERIAL BANK |
Airbus SE and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus SE and CDN IMPERIAL
The main advantage of trading using opposite Airbus SE and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| Airbus SE vs. General Dynamics | Airbus SE vs. Superior Plus Corp | Airbus SE vs. Origin Agritech | Airbus SE vs. INTUITIVE SURGICAL |
| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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