Correlation Between SYSTEMAIR and AIR LIQUIDE
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR 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 SYSTEMAIR and AIR LIQUIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and AIR LIQUIDE ADR, you can compare the effects of market volatilities on SYSTEMAIR 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 SYSTEMAIR with a short position of AIR LIQUIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and AIR LIQUIDE.
Diversification Opportunities for SYSTEMAIR and AIR LIQUIDE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SYSTEMAIR and AIR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR and SYSTEMAIR 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 SYSTEMAIR AB 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 ADR has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and AIR LIQUIDE go up and down completely randomly.
Pair Corralation between SYSTEMAIR and AIR LIQUIDE
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.88 times more return on investment than AIR LIQUIDE. However, SYSTEMAIR is 1.88 times more volatile than AIR LIQUIDE ADR. It trades about 0.07 of its potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about 0.02 per unit of risk. If you would invest 423.00 in SYSTEMAIR AB on August 28, 2024 and sell it today you would earn a total of 372.00 from holding SYSTEMAIR AB or generate 87.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
SYSTEMAIR AB vs. AIR LIQUIDE ADR
Performance |
| Timeline |
| SYSTEMAIR AB |
| AIR LIQUIDE ADR |
SYSTEMAIR and AIR LIQUIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and AIR LIQUIDE
The main advantage of trading using opposite SYSTEMAIR and AIR LIQUIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR 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.| SYSTEMAIR vs. AUST AGRICULTURAL | SYSTEMAIR vs. AGRICULTBK HADR25 YC | SYSTEMAIR vs. GEAR4MUSIC LS 10 | SYSTEMAIR vs. TITAN MACHINERY |
| AIR LIQUIDE vs. Superior Plus Corp | AIR LIQUIDE vs. NMI Holdings | AIR LIQUIDE vs. Origin Agritech | AIR LIQUIDE vs. SIVERS SEMICONDUCTORS AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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