Correlation Between Air Liquide and Fleury Michon
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Fleury Michon 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 Liquide and Fleury Michon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Liquide SA and Fleury Michon, you can compare the effects of market volatilities on Air Liquide and Fleury Michon 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 Liquide with a short position of Fleury Michon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Fleury Michon.
Diversification Opportunities for Air Liquide and Fleury Michon
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Fleury is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Fleury Michon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fleury Michon and Air Liquide 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 Liquide SA are associated (or correlated) with Fleury Michon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fleury Michon has no effect on the direction of Air Liquide i.e., Air Liquide and Fleury Michon go up and down completely randomly.
Pair Corralation between Air Liquide and Fleury Michon
Assuming the 90 days horizon Air Liquide SA is expected to under-perform the Fleury Michon. But the stock apears to be less risky and, when comparing its historical volatility, Air Liquide SA is 1.13 times less risky than Fleury Michon. The stock trades about -0.32 of its potential returns per unit of risk. The Fleury Michon is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,390 in Fleury Michon on August 30, 2024 and sell it today you would earn a total of 110.00 from holding Fleury Michon or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. Fleury Michon
Performance |
| Timeline |
| Air Liquide SA |
| Fleury Michon |
Air Liquide and Fleury Michon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Fleury Michon
The main advantage of trading using opposite Air Liquide and Fleury Michon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Fleury Michon 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 Fleury Michon will offset losses from the drop in Fleury Michon's long position.| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
| Fleury Michon vs. Stef SA | Fleury Michon vs. Bonduelle SCA | Fleury Michon vs. VIEL Cie socit | Fleury Michon vs. Groupe Guillin 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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