Correlation Between Air France and Invibes Advertising
Can any of the company-specific risk be diversified away by investing in both Air France and Invibes Advertising 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 Air France and Invibes Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air France KLM SA and Invibes Advertising NV, you can compare the effects of market volatilities on Air France and Invibes Advertising 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 Air France with a short position of Invibes Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and Invibes Advertising.
Diversification Opportunities for Air France and Invibes Advertising
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Invibes is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and Invibes Advertising NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invibes Advertising and Air France 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 Air France KLM SA are associated (or correlated) with Invibes Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invibes Advertising has no effect on the direction of Air France i.e., Air France and Invibes Advertising go up and down completely randomly.
Pair Corralation between Air France and Invibes Advertising
Assuming the 90 days horizon Air France KLM SA is expected to under-perform the Invibes Advertising. In addition to that, Air France is 1.48 times more volatile than Invibes Advertising NV. It trades about -0.34 of its total potential returns per unit of risk. Invibes Advertising NV is currently generating about -0.35 per unit of volatility. If you would invest 322.00 in Invibes Advertising NV on August 26, 2024 and sell it today you would lose (45.00) from holding Invibes Advertising NV or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air France KLM SA vs. Invibes Advertising NV
Performance |
| Timeline |
| Air France KLM |
| Invibes Advertising |
Air France and Invibes Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air France and Invibes Advertising
The main advantage of trading using opposite Air France and Invibes Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, Invibes Advertising 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 Invibes Advertising will offset losses from the drop in Invibes Advertising's long position.| Air France vs. Manitou BF SA | Air France vs. Ossiam Minimum Variance | Air France vs. Granite 3x LVMH | Air France vs. 21Shares Polkadot ETP |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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