Correlation Between Air Liquide and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Dassault Systemes 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 Dassault Systemes 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 Dassault Systemes SE, you can compare the effects of market volatilities on Air Liquide and Dassault Systemes 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 Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Dassault Systemes.
Diversification Opportunities for Air Liquide and Dassault Systemes
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Dassault is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Dassault Systemes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes 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 Dassault Systemes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systemes has no effect on the direction of Air Liquide i.e., Air Liquide and Dassault Systemes go up and down completely randomly.
Pair Corralation between Air Liquide and Dassault Systemes
Assuming the 90 days horizon Air Liquide SA is expected to generate 0.71 times more return on investment than Dassault Systemes. However, Air Liquide SA is 1.41 times less risky than Dassault Systemes. It trades about 0.06 of its potential returns per unit of risk. Dassault Systemes SE is currently generating about 0.01 per unit of risk. If you would invest 12,697 in Air Liquide SA on November 2, 2024 and sell it today you would earn a total of 4,217 from holding Air Liquide SA or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. Dassault Systemes SE
Performance |
| Timeline |
| Air Liquide SA |
| Dassault Systemes |
Air Liquide and Dassault Systemes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Dassault Systemes
The main advantage of trading using opposite Air Liquide and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Dassault Systemes 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 Dassault Systemes will offset losses from the drop in Dassault Systemes' long position.| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
| Dassault Systemes vs. Thales SA | Dassault Systemes vs. Safran SA | Dassault Systemes vs. Air Liquide SA | Dassault Systemes vs. Capgemini SE |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |