Correlation Between Airbus SE and Séché Environnement
Can any of the company-specific risk be diversified away by investing in both Airbus SE and Séché Environnement 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 Séché Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and Sch Environnement SA, you can compare the effects of market volatilities on Airbus SE and Séché Environnement 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 Séché Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and Séché Environnement.
Diversification Opportunities for Airbus SE and Séché Environnement
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Airbus and Séché is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and Sch Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Séché Environnement 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 Séché Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Séché Environnement has no effect on the direction of Airbus SE i.e., Airbus SE and Séché Environnement go up and down completely randomly.
Pair Corralation between Airbus SE and Séché Environnement
Assuming the 90 days trading horizon Airbus SE is expected to generate 0.94 times more return on investment than Séché Environnement. However, Airbus SE is 1.06 times less risky than Séché Environnement. It trades about 0.05 of its potential returns per unit of risk. Sch Environnement SA is currently generating about -0.02 per unit of risk. If you would invest 2,915 in Airbus SE on October 13, 2024 and sell it today you would earn a total of 985.00 from holding Airbus SE or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus SE vs. Sch Environnement SA
Performance |
| Timeline |
| Airbus SE |
| Séché Environnement |
Airbus SE and Séché Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus SE and Séché Environnement
The main advantage of trading using opposite Airbus SE and Séché Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE position performs unexpectedly, Séché Environnement 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 Séché Environnement will offset losses from the drop in Séché Environnement's long position.| Airbus SE vs. Harmony Gold Mining | Airbus SE vs. Aya Gold Silver | Airbus SE vs. Monument Mining Limited | Airbus SE vs. De Grey Mining |
| Séché Environnement vs. EAGLE MATERIALS | Séché Environnement vs. Applied Materials | Séché Environnement vs. VULCAN MATERIALS | Séché Environnement vs. SILVER BULLET DATA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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