Correlation Between SPORT LISBOA and Airbus SE
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA and Airbus SE 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 SPORT LISBOA and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Airbus SE, you can compare the effects of market volatilities on SPORT LISBOA and Airbus SE 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 SPORT LISBOA with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Airbus SE.
Diversification Opportunities for SPORT LISBOA and Airbus SE
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPORT and Airbus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and SPORT LISBOA 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 SPORT LISBOA E are associated (or correlated) with Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and Airbus SE go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Airbus SE
Assuming the 90 days horizon SPORT LISBOA is expected to generate 1.34 times less return on investment than Airbus SE. In addition to that, SPORT LISBOA is 1.28 times more volatile than Airbus SE. It trades about 0.13 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.23 per unit of volatility. If you would invest 14,016 in Airbus SE on September 5, 2024 and sell it today you would earn a total of 1,200 from holding Airbus SE or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. Airbus SE
Performance |
| Timeline |
| SPORT LISBOA E |
| Airbus SE |
SPORT LISBOA and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Airbus SE
The main advantage of trading using opposite SPORT LISBOA and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| SPORT LISBOA vs. G8 EDUCATION | SPORT LISBOA vs. Strategic Education | SPORT LISBOA vs. IDP EDUCATION LTD | SPORT LISBOA vs. American Public Education |
| Airbus SE vs. CDN IMPERIAL BANK | Airbus SE vs. Ming Le Sports | Airbus SE vs. JSC Halyk bank | Airbus SE vs. SPORT LISBOA E |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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