Correlation Between Boeing and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Boeing 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 Boeing and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Airbus SE, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Airbus SE.
Diversification Opportunities for Boeing and Airbus SE
Significant diversification
The 3 months correlation between Boeing and Airbus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and Boeing 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 The Boeing 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 Boeing i.e., Boeing and Airbus SE go up and down completely randomly.
Pair Corralation between Boeing and Airbus SE
Assuming the 90 days trading horizon The Boeing is expected to generate 1.16 times more return on investment than Airbus SE. However, Boeing is 1.16 times more volatile than Airbus SE. It trades about 0.17 of its potential returns per unit of risk. Airbus SE is currently generating about 0.12 per unit of risk. If you would invest 13,798 in The Boeing on September 2, 2024 and sell it today you would earn a total of 986.00 from holding The Boeing or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Airbus SE
Performance |
| Timeline |
| Boeing |
| Airbus SE |
Boeing and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Airbus SE
The main advantage of trading using opposite Boeing and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.| Boeing vs. Plastic Omnium | Boeing vs. Compagnie Plastic Omnium | Boeing vs. Pick n Pay | Boeing vs. Caseys General Stores |
| Airbus SE vs. LION ONE METALS | Airbus SE vs. SERI INDUSTRIAL EO | Airbus SE vs. MCEWEN MINING INC | Airbus SE vs. Penn National Gaming |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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