Correlation Between Vicat SA and Airbus Group

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

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

Diversification Opportunities for Vicat SA and Airbus Group

0.23

Correlation Coefficient

Vicat SA  Airbus Group

Modest diversification

The 3 months correlation between Vicat and Airbus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vicat 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 Vicat SA 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 Vicat 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 Vicat SA i.e., Vicat SA and Airbus Group go up and down completely randomly.

Pair Corralation between Vicat SA and Airbus Group

Assuming the 90 days trading horizon Vicat SA is expected to generate 1.92 times less return on investment than Airbus Group. In addition to that, Vicat SA is 1.08 times more volatile than Airbus Group SE. It trades about 0.05 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vicat SA  vs.  Airbus Group SE

Vicat SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vicat SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Vicat SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 Vicat SA and Airbus Group

The main advantage of trading using opposite Vicat SA and Airbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicat SA 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 Vicat 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.