Correlation Between Corporate Travel and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and Air Liquide 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 Corporate Travel and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and Air Liquide SA, you can compare the effects of market volatilities on Corporate Travel and Air Liquide 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 Corporate Travel with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and Air Liquide.
Diversification Opportunities for Corporate Travel and Air Liquide
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corporate and Air is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Corporate Travel i.e., Corporate Travel and Air Liquide go up and down completely randomly.
Pair Corralation between Corporate Travel and Air Liquide
Assuming the 90 days trading horizon Corporate Travel is expected to generate 8.26 times less return on investment than Air Liquide. In addition to that, Corporate Travel is 2.33 times more volatile than Air Liquide SA. It trades about 0.0 of its total potential returns per unit of risk. Air Liquide SA is currently generating about 0.04 per unit of volatility. If you would invest 13,965 in Air Liquide SA on August 25, 2024 and sell it today you would earn a total of 1,791 from holding Air Liquide SA or generate 12.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Corporate Travel Management vs. Air Liquide SA
Performance |
Timeline |
Corporate Travel Man |
Air Liquide SA |
Corporate Travel and Air Liquide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Corporate Travel and Air Liquide
The main advantage of trading using opposite Corporate Travel and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.Corporate Travel vs. EPSILON HEALTHCARE LTD | Corporate Travel vs. Ramsay Health Care | Corporate Travel vs. Bumrungrad Hospital Public | Corporate Travel vs. MGIC INVESTMENT |
Air Liquide vs. Corporate Travel Management | Air Liquide vs. CeoTronics AG | Air Liquide vs. Cleanaway Waste Management | Air Liquide vs. Playa Hotels Resorts |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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