Correlation Between Airbus SE and CTT -
Can any of the company-specific risk be diversified away by investing in both Airbus SE and CTT - 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 CTT - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and CTT Correios, you can compare the effects of market volatilities on Airbus SE and CTT - 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 CTT -. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and CTT -.
Diversification Opportunities for Airbus SE and CTT -
Modest diversification
The 3 months correlation between Airbus and CTT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and CTT Correios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios 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 CTT -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios has no effect on the direction of Airbus SE i.e., Airbus SE and CTT - go up and down completely randomly.
Pair Corralation between Airbus SE and CTT -
Assuming the 90 days trading horizon Airbus SE is expected to generate 1.54 times less return on investment than CTT -. In addition to that, Airbus SE is 1.05 times more volatile than CTT Correios. It trades about 0.04 of its total potential returns per unit of risk. CTT Correios is currently generating about 0.06 per unit of volatility. If you would invest 328.00 in CTT Correios on October 16, 2024 and sell it today you would earn a total of 198.00 from holding CTT Correios or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus SE vs. CTT Correios
Performance |
| Timeline |
| Airbus SE |
| CTT Correios |
Airbus SE and CTT - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus SE and CTT -
The main advantage of trading using opposite Airbus SE and CTT - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, CTT - 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 CTT - will offset losses from the drop in CTT -'s long position.| Airbus SE vs. GALENA MINING LTD | Airbus SE vs. Align Technology | Airbus SE vs. Alfa Financial Software | Airbus SE vs. MAGNUM MINING EXP |
| CTT - vs. QBE Insurance Group | CTT - vs. China Reinsurance | CTT - vs. Tower Semiconductor | CTT - vs. Universal Insurance Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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