Correlation Between Air France and SBF 120
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By analyzing existing cross correlation between Air France KLM SA and SBF 120, you can compare the effects of market volatilities on Air France and SBF 120 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 SBF 120. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and SBF 120.
Diversification Opportunities for Air France and SBF 120
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and SBF is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and SBF 120 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBF 120 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 SBF 120. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBF 120 has no effect on the direction of Air France i.e., Air France and SBF 120 go up and down completely randomly.
Pair Corralation between Air France and SBF 120
Assuming the 90 days horizon Air France KLM SA is expected to generate 4.08 times more return on investment than SBF 120. However, Air France is 4.08 times more volatile than SBF 120. It trades about 0.23 of its potential returns per unit of risk. SBF 120 is currently generating about 0.15 per unit of risk. If you would invest 751.00 in Air France KLM SA on September 20, 2024 and sell it today you would earn a total of 92.00 from holding Air France KLM SA or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air France KLM SA vs. SBF 120
Performance |
| Timeline |
Air France and SBF 120 Volatility Contrast
Predicted Return Density |
| Returns |
Air France KLM SA
Pair trading matchups for Air France
SBF 120
Pair trading matchups for SBF 120
Pair Trading with Air France and SBF 120
The main advantage of trading using opposite Air France and SBF 120 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, SBF 120 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 SBF 120 will offset losses from the drop in SBF 120's long position.The idea behind Air France KLM SA and SBF 120 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SBF 120 vs. Gaztransport Technigaz SAS | SBF 120 vs. Pullup Entertainment Socit | SBF 120 vs. Reworld Media | SBF 120 vs. Air France KLM SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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