Correlation Between AIR PRODCHEMICALS and Airbus SE
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Airbus SE 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 AIR PRODCHEMICALS and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Airbus SE, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Airbus SE 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 AIR PRODCHEMICALS with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Airbus SE.
Diversification Opportunities for AIR PRODCHEMICALS and Airbus SE
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIR and Airbus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS are associated (or correlated) with Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Airbus SE go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Airbus SE
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.71 times more return on investment than Airbus SE. However, AIR PRODCHEMICALS is 1.41 times less risky than Airbus SE. It trades about 0.59 of its potential returns per unit of risk. Airbus SE is currently generating about 0.14 per unit of risk. If you would invest 27,630 in AIR PRODCHEMICALS on November 4, 2024 and sell it today you would earn a total of 4,760 from holding AIR PRODCHEMICALS or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Airbus SE
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Airbus SE |
AIR PRODCHEMICALS and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Airbus SE
The main advantage of trading using opposite AIR PRODCHEMICALS and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| AIR PRODCHEMICALS vs. Air Lease | AIR PRODCHEMICALS vs. INTERNET INJPADR 1 | AIR PRODCHEMICALS vs. Verizon Communications | AIR PRODCHEMICALS vs. Zoom Video Communications |
| Airbus SE vs. SINGAPORE AIRLINES | Airbus SE vs. HELIOS TECHS INC | Airbus SE vs. Sunny Optical Technology | Airbus SE vs. ASPEN TECHINC DL |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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