Correlation Between Airbus Group and BWX Technologies
Can any of the company-specific risk be diversified away by investing in both Airbus Group and BWX Technologies 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 BWX Technologies 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 BWX Technologies, you can compare the effects of market volatilities on Airbus Group and BWX Technologies 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 BWX Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and BWX Technologies.
Diversification Opportunities for Airbus Group and BWX Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Airbus and BWX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and BWX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BWX Technologies 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 BWX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BWX Technologies has no effect on the direction of Airbus Group i.e., Airbus Group and BWX Technologies go up and down completely randomly.
Pair Corralation between Airbus Group and BWX Technologies
Assuming the 90 days horizon Airbus Group SE is expected to under-perform the BWX Technologies. In addition to that, Airbus Group is 1.16 times more volatile than BWX Technologies. It trades about -0.03 of its total potential returns per unit of risk. BWX Technologies is currently generating about 0.26 per unit of volatility. If you would invest 10,849 in BWX Technologies on August 29, 2024 and sell it today you would earn a total of 2,387 from holding BWX Technologies or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Airbus Group SE vs. BWX Technologies
Performance |
| Timeline |
| Airbus Group SE |
| BWX Technologies |
Airbus Group and BWX Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and BWX Technologies
The main advantage of trading using opposite Airbus Group and BWX Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, BWX Technologies 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 BWX Technologies will offset losses from the drop in BWX Technologies' 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 |
| BWX Technologies vs. Nauticus Robotics | BWX Technologies vs. Innovative Solutions and | BWX Technologies vs. National Presto Industries | BWX Technologies vs. Hexcel |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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