Correlation Between Airbus Group and HEICO
Can any of the company-specific risk be diversified away by investing in both Airbus Group and HEICO 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 HEICO 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 HEICO, you can compare the effects of market volatilities on Airbus Group and HEICO 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 HEICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and HEICO.
Diversification Opportunities for Airbus Group and HEICO
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airbus and HEICO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group NV and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO 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 HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of Airbus Group i.e., Airbus Group and HEICO go up and down completely randomly.
Pair Corralation between Airbus Group and HEICO
Assuming the 90 days horizon Airbus Group NV is expected to under-perform the HEICO. In addition to that, Airbus Group is 1.15 times more volatile than HEICO. It trades about -0.15 of its total potential returns per unit of risk. HEICO is currently generating about 0.31 per unit of volatility. If you would invest 19,436 in HEICO on August 29, 2024 and sell it today you would earn a total of 2,051 from holding HEICO or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus Group NV vs. HEICO
Performance |
| Timeline |
| Airbus Group NV |
| HEICO |
Airbus Group and HEICO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and HEICO
The main advantage of trading using opposite Airbus Group and HEICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, HEICO 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 HEICO will offset losses from the drop in HEICO's long position.| Airbus Group vs. Safran SA | Airbus Group vs. Moog Inc | Airbus Group vs. BAE Systems PLC | Airbus Group vs. Airbus Group SE |
| HEICO vs. Vertical Aerospace | HEICO vs. Rolls Royce Holdings plc | HEICO vs. Embraer SA ADR | HEICO vs. Rocket Lab USA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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