Correlation Between Apple and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Airbus SE, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Airbus SE.
Diversification Opportunities for Apple and Airbus SE
Very poor diversification
The 3 months correlation between Apple and Airbus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and Apple 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 Apple Inc 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 Apple i.e., Apple and Airbus SE go up and down completely randomly.
Pair Corralation between Apple and Airbus SE
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Airbus SE. In addition to that, Apple is 1.28 times more volatile than Airbus SE. It trades about -0.33 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.17 per unit of volatility. If you would invest 15,602 in Airbus SE on October 20, 2024 and sell it today you would earn a total of 488.00 from holding Airbus SE or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Airbus SE
Performance |
| Timeline |
| Apple Inc |
| Airbus SE |
Apple and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Airbus SE
The main advantage of trading using opposite Apple and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. SLR Investment Corp | Apple vs. ALBIS LEASING AG | Apple vs. AGNC INVESTMENT | Apple vs. PennantPark Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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