Correlation Between Caltagirone SpA and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA 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 Caltagirone SpA and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and Airbus SE, you can compare the effects of market volatilities on Caltagirone SpA 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 Caltagirone SpA with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Airbus SE.
Diversification Opportunities for Caltagirone SpA and Airbus SE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caltagirone and Airbus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA i.e., Caltagirone SpA and Airbus SE go up and down completely randomly.
Pair Corralation between Caltagirone SpA and Airbus SE
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 2.02 times less return on investment than Airbus SE. In addition to that, Caltagirone SpA is 2.09 times more volatile than Airbus SE. It trades about 0.06 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.25 per unit of volatility. If you would invest 12,652 in Airbus SE on September 3, 2024 and sell it today you would earn a total of 2,108 from holding Airbus SE or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. Airbus SE
Performance |
| Timeline |
| Caltagirone SpA |
| Airbus SE |
Caltagirone SpA and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and Airbus SE
The main advantage of trading using opposite Caltagirone SpA and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA 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.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| Airbus SE vs. Raytheon Technologies Corp | Airbus SE vs. The Boeing | Airbus SE vs. Airbus SE | Airbus SE vs. Superior Plus Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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