Correlation Between Air France and Compagnie Des
Can any of the company-specific risk be diversified away by investing in both Air France and Compagnie Des 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 Compagnie Des 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 Compagnie des Tramways, you can compare the effects of market volatilities on Air France and Compagnie Des 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 Compagnie Des. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and Compagnie Des.
Diversification Opportunities for Air France and Compagnie Des
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Compagnie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and Compagnie des Tramways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie des Tramways 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 Compagnie Des. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie des Tramways has no effect on the direction of Air France i.e., Air France and Compagnie Des go up and down completely randomly.
Pair Corralation between Air France and Compagnie Des
Assuming the 90 days horizon Air France KLM SA is expected to under-perform the Compagnie Des. But the stock apears to be less risky and, when comparing its historical volatility, Air France KLM SA is 1.21 times less risky than Compagnie Des. The stock trades about -0.09 of its potential returns per unit of risk. The Compagnie des Tramways is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 512,824 in Compagnie des Tramways on September 2, 2024 and sell it today you would earn a total of 407,176 from holding Compagnie des Tramways or generate 79.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.26% |
| Values | Daily Returns |
Air France KLM SA vs. Compagnie des Tramways
Performance |
| Timeline |
| Air France KLM |
| Compagnie des Tramways |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air France and Compagnie Des Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air France and Compagnie Des
The main advantage of trading using opposite Air France and Compagnie Des positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, Compagnie Des 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 Compagnie Des will offset losses from the drop in Compagnie Des' long position.| Air France vs. Jacquet Metal Service | Air France vs. Bilendi | Air France vs. Eutelsat Communications SA | Air France vs. Credit Agricole SA |
| Compagnie Des vs. Reworld Media | Compagnie Des vs. Hotel Majestic Cannes | Compagnie Des vs. Sogeclair SA | Compagnie Des vs. Axway Software |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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