Correlation Between Air Liquide and Manitou BF
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Manitou BF 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 Manitou BF 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 Manitou BF SA, you can compare the effects of market volatilities on Air Liquide and Manitou BF 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 Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Manitou BF.
Diversification Opportunities for Air Liquide and Manitou BF
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Manitou is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA 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 Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Air Liquide i.e., Air Liquide and Manitou BF go up and down completely randomly.
Pair Corralation between Air Liquide and Manitou BF
Assuming the 90 days horizon Air Liquide SA is expected to generate 0.53 times more return on investment than Manitou BF. However, Air Liquide SA is 1.89 times less risky than Manitou BF. It trades about -0.25 of its potential returns per unit of risk. Manitou BF SA is currently generating about -0.18 per unit of risk. If you would invest 16,630 in Air Liquide SA on September 2, 2024 and sell it today you would lose (902.00) from holding Air Liquide SA or give up 5.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. Manitou BF SA
Performance |
| Timeline |
| Air Liquide SA |
| Manitou BF SA |
Air Liquide and Manitou BF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Manitou BF
The main advantage of trading using opposite Air Liquide and Manitou BF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Manitou BF 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 Manitou BF will offset losses from the drop in Manitou BF's long position.| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
| Manitou BF vs. Air Liquide SA | Manitou BF vs. Vinci SA | Manitou BF vs. LOreal SA | Manitou BF vs. Compagnie de Saint Gobain |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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