Correlation Between Thermador Groupe and Airbus Group

Can any of the company-specific risk be diversified away by investing in both Thermador Groupe and Airbus Group 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 Thermador Groupe and Airbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thermador Groupe SA and Airbus Group SE, you can compare the effects of market volatilities on Thermador Groupe and Airbus Group 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 Thermador Groupe with a short position of Airbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermador Groupe and Airbus Group.

Diversification Opportunities for Thermador Groupe and Airbus Group

-0.67

Correlation Coefficient

Thermador Groupe  Airbus Group

Excellent diversification

The 3 months correlation between Thermador and Airbus is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Airbus Group SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus Group SE and Thermador Groupe 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 Thermador Groupe SA are associated (or correlated) with Airbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus Group SE has no effect on the direction of Thermador Groupe i.e., Thermador Groupe and Airbus Group go up and down completely randomly.

Pair Corralation between Thermador Groupe and Airbus Group

Assuming the 90 days trading horizon Thermador Groupe SA is expected to under-perform the Airbus Group. In addition to that, Thermador Groupe is 1.07 times more volatile than Airbus Group SE. It trades about -0.03 of its total potential returns per unit of risk. Airbus Group SE is currently generating about 0.1 per unit of volatility. If you would invest  12,826  in Airbus Group SE on September 26, 2024 and sell it today you would earn a total of  2,544  from holding Airbus Group SE or generate 19.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Thermador Groupe SA  vs.  Airbus Group SE

Thermador Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermador Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Airbus Group SE

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus Group SE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Airbus Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thermador Groupe and Airbus Group

The main advantage of trading using opposite Thermador Groupe and Airbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermador Groupe position performs unexpectedly, Airbus Group 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 Group will offset losses from the drop in Airbus Group's long position.

The idea behind Thermador Groupe SA and Airbus Group SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.