Correlation Between Airbus Group and Thales SA
Can any of the company-specific risk be diversified away by investing in both Airbus Group and Thales SA 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 Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus Group SE and Thales SA, you can compare the effects of market volatilities on Airbus Group and Thales SA 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 Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Thales SA.
Diversification Opportunities for Airbus Group and Thales SA
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Airbus and Thales is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group SE and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA 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 SE are associated (or correlated) with Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Airbus Group i.e., Airbus Group and Thales SA go up and down completely randomly.
Pair Corralation between Airbus Group and Thales SA
Assuming the 90 days trading horizon Airbus Group SE is expected to under-perform the Thales SA. But the stock apears to be less risky and, when comparing its historical volatility, Airbus Group SE is 1.1 times less risky than Thales SA. The stock trades about 0.0 of its potential returns per unit of risk. The Thales SA is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 13,854 in Thales SA on March 9, 2024 and sell it today you would earn a total of 3,296 from holding Thales SA or generate 23.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Airbus Group SE vs. Thales SA
Performance |
Timeline |
Airbus Group SE |
Thales SA |
Airbus Group and Thales SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Airbus Group and Thales SA
The main advantage of trading using opposite Airbus Group and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group position performs unexpectedly, Thales SA 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 Thales SA will offset losses from the drop in Thales SA's long position.Airbus Group vs. Hybrigenics | Airbus Group vs. Manitou BF SA | Airbus Group vs. Ekinops SA | Airbus Group vs. Vivendi SA |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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