Correlation Between Air France and Fiducial Office
Can any of the company-specific risk be diversified away by investing in both Air France and Fiducial Office 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 Fiducial Office 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 Fiducial Office Solutions, you can compare the effects of market volatilities on Air France and Fiducial Office 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 Fiducial Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and Fiducial Office.
Diversification Opportunities for Air France and Fiducial Office
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Fiducial is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and Fiducial Office Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiducial Office Solutions 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 Fiducial Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiducial Office Solutions has no effect on the direction of Air France i.e., Air France and Fiducial Office go up and down completely randomly.
Pair Corralation between Air France and Fiducial Office
Assuming the 90 days horizon Air France KLM SA is expected to generate 10.03 times more return on investment than Fiducial Office. However, Air France is 10.03 times more volatile than Fiducial Office Solutions. It trades about 0.02 of its potential returns per unit of risk. Fiducial Office Solutions is currently generating about 0.0 per unit of risk. If you would invest 763.00 in Air France KLM SA on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Air France KLM SA or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air France KLM SA vs. Fiducial Office Solutions
Performance |
| Timeline |
| Air France KLM |
| Fiducial Office Solutions |
Air France and Fiducial Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air France and Fiducial Office
The main advantage of trading using opposite Air France and Fiducial Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, Fiducial Office 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 Fiducial Office will offset losses from the drop in Fiducial Office's long position.| Air France vs. Boiron SA | Air France vs. Parx Plastics NV | Air France vs. X Fab Silicon | Air France vs. Affluent Medical SAS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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