Correlation Between Amedeo Air and Givaudan
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and Givaudan 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 Amedeo Air and Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and Givaudan SA, you can compare the effects of market volatilities on Amedeo Air and Givaudan 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 Amedeo Air with a short position of Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and Givaudan.
Diversification Opportunities for Amedeo Air and Givaudan
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amedeo and Givaudan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Amedeo Air i.e., Amedeo Air and Givaudan go up and down completely randomly.
Pair Corralation between Amedeo Air and Givaudan
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.62 times more return on investment than Givaudan. However, Amedeo Air Four is 1.62 times less risky than Givaudan. It trades about 0.39 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.02 per unit of risk. If you would invest 5,270 in Amedeo Air Four on September 24, 2024 and sell it today you would earn a total of 270.00 from holding Amedeo Air Four or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedeo Air Four vs. Givaudan SA
Performance |
| Timeline |
| Amedeo Air Four |
| Givaudan SA |
Amedeo Air and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and Givaudan
The main advantage of trading using opposite Amedeo Air and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Amedeo Air vs. Foresight Environmental Infrastructure | Amedeo Air vs. CleanTech Lithium plc | Amedeo Air vs. Various Eateries PLC | Amedeo Air vs. mobilezone holding AG |
| Givaudan vs. Lowland Investment Co | Givaudan vs. Kinnevik Investment AB | Givaudan vs. Beeks Trading | Givaudan vs. MyHealthChecked Plc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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