Correlation Between Granite 3x and Air France
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Air France 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 Granite 3x and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Air France KLM SA, you can compare the effects of market volatilities on Granite 3x and Air France 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 Granite 3x with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Air France.
Diversification Opportunities for Granite 3x and Air France
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and Air is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Granite 3x i.e., Granite 3x and Air France go up and down completely randomly.
Pair Corralation between Granite 3x and Air France
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Air France. In addition to that, Granite 3x is 2.57 times more volatile than Air France KLM SA. It trades about -0.02 of its total potential returns per unit of risk. Air France KLM SA is currently generating about -0.03 per unit of volatility. If you would invest 1,273 in Air France KLM SA on August 26, 2024 and sell it today you would lose (537.00) from holding Air France KLM SA or give up 42.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.36% |
| Values | Daily Returns |
Granite 3x LVMH vs. Air France KLM SA
Performance |
| Timeline |
| Granite 3x LVMH |
| Air France KLM |
Granite 3x and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Air France
The main advantage of trading using opposite Granite 3x and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Air France 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 France will offset losses from the drop in Air France's long position.| Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Stoxx | Granite 3x vs. Amundi CAC 40 |
| Air France vs. Manitou BF SA | Air France vs. Ossiam Minimum Variance | Air France vs. Granite 3x LVMH | Air France vs. 21Shares Polkadot ETP |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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