Correlation Between AMADEUS IT and AeroVironment
Can any of the company-specific risk be diversified away by investing in both AMADEUS IT and AeroVironment 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 AMADEUS IT and AeroVironment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMADEUS IT GRP and AeroVironment, you can compare the effects of market volatilities on AMADEUS IT and AeroVironment 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 AMADEUS IT with a short position of AeroVironment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMADEUS IT and AeroVironment.
Diversification Opportunities for AMADEUS IT and AeroVironment
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMADEUS and AeroVironment is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AMADEUS IT GRP and AeroVironment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroVironment and AMADEUS IT 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 AMADEUS IT GRP are associated (or correlated) with AeroVironment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroVironment has no effect on the direction of AMADEUS IT i.e., AMADEUS IT and AeroVironment go up and down completely randomly.
Pair Corralation between AMADEUS IT and AeroVironment
Assuming the 90 days trading horizon AMADEUS IT GRP is expected to under-perform the AeroVironment. But the stock apears to be less risky and, when comparing its historical volatility, AMADEUS IT GRP is 2.46 times less risky than AeroVironment. The stock trades about -0.12 of its potential returns per unit of risk. The AeroVironment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 21,370 in AeroVironment on August 28, 2025 and sell it today you would earn a total of 2,920 from holding AeroVironment or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
AMADEUS IT GRP vs. AeroVironment
Performance |
| Timeline |
| AMADEUS IT GRP |
| AeroVironment |
AMADEUS IT and AeroVironment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMADEUS IT and AeroVironment
The main advantage of trading using opposite AMADEUS IT and AeroVironment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMADEUS IT position performs unexpectedly, AeroVironment 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 AeroVironment will offset losses from the drop in AeroVironment's long position.| AMADEUS IT vs. MAGIC SOFTWARE ENTR | AMADEUS IT vs. Alfa Financial Software | AMADEUS IT vs. UPDATE SOFTWARE | AMADEUS IT vs. OFFICE DEPOT |
| AeroVironment vs. Raytheon Technologies Corp | AeroVironment vs. The Boeing | AeroVironment vs. Lockheed Martin | AeroVironment vs. The Boeing |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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