Correlation Between Airbus Group and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both Airbus Group and Coda Octopus 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 Coda Octopus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus Group NV and Coda Octopus Group, you can compare the effects of market volatilities on Airbus Group and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Coda Octopus.
Diversification Opportunities for Airbus Group and Coda Octopus
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Airbus and Coda is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group NV and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 NV are associated (or correlated) with Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Airbus Group i.e., Airbus Group and Coda Octopus go up and down completely randomly.
Pair Corralation between Airbus Group and Coda Octopus
Assuming the 90 days horizon Airbus Group NV is expected to under-perform the Coda Octopus. But the pink sheet apears to be less risky and, when comparing its historical volatility, Airbus Group NV is 1.78 times less risky than Coda Octopus. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Coda Octopus Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 819.00 in Coda Octopus Group on August 25, 2024 and sell it today you would earn a total of 113.00 from holding Coda Octopus Group or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Airbus Group NV vs. Coda Octopus Group
Performance |
| Timeline |
| Airbus Group NV |
| Coda Octopus Group |
Airbus Group and Coda Octopus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and Coda Octopus
The main advantage of trading using opposite Airbus Group and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.| Airbus Group vs. Safran SA | Airbus Group vs. Moog Inc | Airbus Group vs. BAE Systems PLC | Airbus Group vs. Airbus Group SE |
| Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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