Correlation Between Airbus SE and HEICO

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

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

Diversification Opportunities for Airbus SE and HEICO

0.88

Correlation Coefficient

Airbus SE  HEICO

Very poor diversification

The 3 months correlation between Airbus and HEICO is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO and Airbus SE 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 SE are associated (or correlated) with HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of Airbus SE i.e., Airbus SE and HEICO go up and down completely randomly.

Pair Corralation between Airbus SE and HEICO

Assuming the 90 days horizon Airbus SE is expected to generate 0.8 times more return on investment than HEICO. However, Airbus SE is 1.26 times less risky than HEICO. It trades about 0.27 of its potential returns per unit of risk. HEICO is currently generating about 0.17 per unit of risk. If you would invest  14,130  in Airbus SE on April 25, 2025 and sell it today you would earn a total of  4,502  from holding Airbus SE or generate 31.86% return on investment over 90 days.

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

Airbus SE  vs.  HEICO

Airbus SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Airbus SE reported solid returns over the last few months and may actually be approaching a breakup point.

HEICO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HEICO are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEICO reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airbus SE and HEICO

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

The idea behind Airbus SE and HEICO 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.