Correlation Between INTER CARS and Air Liquide
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Air Liquide SA, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Air Liquide.
Diversification Opportunities for INTER CARS and Air Liquide
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INTER and Air is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA 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 INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and Air Liquide go up and down completely randomly.
Pair Corralation between INTER CARS and Air Liquide
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.82 times more return on investment than Air Liquide. However, INTER CARS is 1.82 times more volatile than Air Liquide SA. It trades about 0.04 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.03 per unit of risk. If you would invest 12,407 in INTER CARS SA on November 28, 2024 and sell it today you would earn a total of 1,493 from holding INTER CARS SA or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Air Liquide SA
Performance |
| Timeline |
| INTER CARS SA |
| Air Liquide SA |
INTER CARS and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Air Liquide
The main advantage of trading using opposite INTER CARS and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. CAIRN HOMES EO | INTER CARS vs. DFS Furniture PLC | INTER CARS vs. Allegheny Technologies Incorporated | INTER CARS vs. CITY OFFICE REIT |
| Air Liquide vs. CENTURIA OFFICE REIT | Air Liquide vs. Office Properties Income | Air Liquide vs. INTERSHOP Communications Aktiengesellschaft | Air Liquide vs. Corporate Office Properties |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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