Correlation Between Airbus Group and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both Airbus Group and Astronics Corp 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 Group and Astronics Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus Group SE and Astronics Corp Cl, you can compare the effects of market volatilities on Airbus Group and Astronics Corp 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 Group with a short position of Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Astronics Corp.
Diversification Opportunities for Airbus Group and Astronics Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airbus and Astronics is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl and Airbus Group 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 Group SE are associated (or correlated) with Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of Airbus Group i.e., Airbus Group and Astronics Corp go up and down completely randomly.
Pair Corralation between Airbus Group and Astronics Corp
Assuming the 90 days horizon Airbus Group SE is expected to generate 0.49 times more return on investment than Astronics Corp. However, Airbus Group SE is 2.03 times less risky than Astronics Corp. It trades about 0.27 of its potential returns per unit of risk. Astronics Corp Cl is currently generating about 0.08 per unit of risk. If you would invest 15,968 in Airbus Group SE on November 3, 2024 and sell it today you would earn a total of 1,332 from holding Airbus Group SE or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus Group SE vs. Astronics Corp Cl
Performance |
| Timeline |
| Airbus Group SE |
| Astronics Corp Cl |
Airbus Group and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and Astronics Corp
The main advantage of trading using opposite Airbus Group and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.| Airbus Group vs. Airbus Group NV | Airbus Group vs. Park Electrochemical | Airbus Group vs. Rolls Royce Holdings PLC | Airbus Group vs. Triumph Group |
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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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