Correlation Between Air Liquide and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Compagnie Generale 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 Compagnie Generale 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 Compagnie Generale des, you can compare the effects of market volatilities on Air Liquide and Compagnie Generale 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 Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Compagnie Generale.
Diversification Opportunities for Air Liquide and Compagnie Generale
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and Compagnie is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des 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 Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Air Liquide i.e., Air Liquide and Compagnie Generale go up and down completely randomly.
Pair Corralation between Air Liquide and Compagnie Generale
Assuming the 90 days horizon Air Liquide SA is expected to generate 0.72 times more return on investment than Compagnie Generale. However, Air Liquide SA is 1.38 times less risky than Compagnie Generale. It trades about 0.41 of its potential returns per unit of risk. Compagnie Generale des is currently generating about 0.16 per unit of risk. If you would invest 15,586 in Air Liquide SA on November 2, 2024 and sell it today you would earn a total of 1,328 from holding Air Liquide SA or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Air Liquide SA vs. Compagnie Generale des
Performance |
| Timeline |
| Air Liquide SA |
| Compagnie Generale des |
Air Liquide and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Compagnie Generale
The main advantage of trading using opposite Air Liquide and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Compagnie Generale 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 Generale will offset losses from the drop in Compagnie Generale's long position.| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
| Compagnie Generale vs. Compagnie de Saint Gobain | Compagnie Generale vs. Pernod Ricard SA | Compagnie Generale vs. Bouygues SA | Compagnie Generale vs. Vinci 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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