Correlation Between Air Liquide and Compagnie
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Compagnie 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 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 de Saint Gobain, you can compare the effects of market volatilities on Air Liquide and Compagnie 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Compagnie.
Diversification Opportunities for Air Liquide and Compagnie
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Compagnie is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Air Liquide i.e., Air Liquide and Compagnie go up and down completely randomly.
Pair Corralation between Air Liquide and Compagnie
Assuming the 90 days horizon Air Liquide is expected to generate 36.32 times less return on investment than Compagnie. But when comparing it to its historical volatility, Air Liquide SA is 1.31 times less risky than Compagnie. It trades about 0.0 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,824 in Compagnie de Saint Gobain on November 2, 2024 and sell it today you would earn a total of 1,234 from holding Compagnie de Saint Gobain or generate 15.77% 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. Compagnie de Saint Gobain
Performance |
| Timeline |
| Air Liquide SA |
| Compagnie de Saint |
Air Liquide and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Compagnie
The main advantage of trading using opposite Air Liquide and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie'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 vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Directory Find actively traded commodities issued by global exchanges |