Correlation Between Airbus SE and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Airbus SE and Pandora AS 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 Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and Pandora AS, you can compare the effects of market volatilities on Airbus SE and Pandora AS 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 Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and Pandora AS.
Diversification Opportunities for Airbus SE and Pandora AS
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Airbus and Pandora is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS 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 Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Airbus SE i.e., Airbus SE and Pandora AS go up and down completely randomly.
Pair Corralation between Airbus SE and Pandora AS
Assuming the 90 days trading horizon Airbus SE is expected to generate 1.17 times more return on investment than Pandora AS. However, Airbus SE is 1.17 times more volatile than Pandora AS. It trades about 0.21 of its potential returns per unit of risk. Pandora AS is currently generating about 0.01 per unit of risk. If you would invest 3,840 in Airbus SE on October 27, 2024 and sell it today you would earn a total of 280.00 from holding Airbus SE or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus SE vs. Pandora AS
Performance |
| Timeline |
| Airbus SE |
| Pandora AS |
Airbus SE and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus SE and Pandora AS
The main advantage of trading using opposite Airbus SE and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.| Airbus SE vs. Zoom Video Communications | Airbus SE vs. ecotel communication ag | Airbus SE vs. Chunghwa Telecom Co | Airbus SE vs. HUTCHISON TELECOMM |
| Pandora AS vs. DISTRICT METALS | Pandora AS vs. PURE FOODS TASMANIA | Pandora AS vs. DAIDO METAL TD | Pandora AS vs. AEON METALS LTD |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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