Correlation Between HYDROFARM HLD and Air Liquide
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD 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 HYDROFARM HLD and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and Air Liquide SA, you can compare the effects of market volatilities on HYDROFARM HLD 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 HYDROFARM HLD with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Air Liquide.
Diversification Opportunities for HYDROFARM HLD and Air Liquide
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between HYDROFARM and Air is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP 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 HYDROFARM HLD 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 HYDROFARM HLD GRP 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 HYDROFARM HLD i.e., HYDROFARM HLD and Air Liquide go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Air Liquide
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 4.98 times more return on investment than Air Liquide. However, HYDROFARM HLD is 4.98 times more volatile than Air Liquide SA. It trades about 0.05 of its potential returns per unit of risk. Air Liquide SA is currently generating about -0.17 per unit of risk. If you would invest 61.00 in HYDROFARM HLD GRP on September 13, 2024 and sell it today you would earn a total of 3.00 from holding HYDROFARM HLD GRP or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Air Liquide SA
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Air Liquide SA |
HYDROFARM HLD and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Air Liquide
The main advantage of trading using opposite HYDROFARM HLD and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD 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.| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
| Air Liquide vs. SPORTING | Air Liquide vs. USWE SPORTS AB | Air Liquide vs. Transport International Holdings | Air Liquide vs. AGNC INVESTMENT |
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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