Correlation Between Air France and Hopening
Can any of the company-specific risk be diversified away by investing in both Air France and Hopening 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 Hopening 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 Hopening SA, you can compare the effects of market volatilities on Air France and Hopening 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 Hopening. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and Hopening.
Diversification Opportunities for Air France and Hopening
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Hopening is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and Hopening SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hopening SA 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 Hopening. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hopening SA has no effect on the direction of Air France i.e., Air France and Hopening go up and down completely randomly.
Pair Corralation between Air France and Hopening
If you would invest 785.00 in Hopening SA on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Hopening SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air France KLM SA vs. Hopening SA
Performance |
| Timeline |
| Air France KLM |
| Hopening SA |
Air France and Hopening Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air France and Hopening
The main advantage of trading using opposite Air France and Hopening positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, Hopening 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 Hopening will offset losses from the drop in Hopening's long position.| Air France vs. Covivio Hotels | Air France vs. Invibes Advertising NV | Air France vs. Broadpeak SA | Air France vs. Union Technologies Informatique |
| Hopening vs. Linedata Services SA | Hopening vs. Mauna Kea Technologies | Hopening vs. Invibes Advertising NV | Hopening vs. Hotel Majestic Cannes |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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