Correlation Between Airbus Group and V2X
Can any of the company-specific risk be diversified away by investing in both Airbus Group and V2X 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 V2X 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 V2X Inc, you can compare the effects of market volatilities on Airbus Group and V2X 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 V2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and V2X.
Diversification Opportunities for Airbus Group and V2X
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Airbus and V2X is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group NV and V2X Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2X Inc 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 V2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2X Inc has no effect on the direction of Airbus Group i.e., Airbus Group and V2X go up and down completely randomly.
Pair Corralation between Airbus Group and V2X
Assuming the 90 days horizon Airbus Group NV is expected to under-perform the V2X. But the pink sheet apears to be less risky and, when comparing its historical volatility, Airbus Group NV is 1.63 times less risky than V2X. The pink sheet trades about -0.07 of its potential returns per unit of risk. The V2X Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,599 in V2X Inc on August 28, 2024 and sell it today you would earn a total of 1,461 from holding V2X Inc or generate 31.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbus Group NV vs. V2X Inc
Performance |
| Timeline |
| Airbus Group NV |
| V2X Inc |
Airbus Group and V2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and V2X
The main advantage of trading using opposite Airbus Group and V2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, V2X 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 V2X will offset losses from the drop in V2X'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 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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