Correlation Between Air Liquide and ROBERTET
Can any of the company-specific risk be diversified away by investing in both Air Liquide and ROBERTET 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 ROBERTET 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 ROBERTET SA INH, you can compare the effects of market volatilities on Air Liquide and ROBERTET 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 ROBERTET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and ROBERTET.
Diversification Opportunities for Air Liquide and ROBERTET
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and ROBERTET is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and ROBERTET SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROBERTET SA INH 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 ROBERTET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROBERTET SA INH has no effect on the direction of Air Liquide i.e., Air Liquide and ROBERTET go up and down completely randomly.
Pair Corralation between Air Liquide and ROBERTET
Assuming the 90 days horizon Air Liquide SA is expected to generate 0.81 times more return on investment than ROBERTET. However, Air Liquide SA is 1.23 times less risky than ROBERTET. It trades about 0.05 of its potential returns per unit of risk. ROBERTET SA INH is currently generating about 0.01 per unit of risk. If you would invest 11,886 in Air Liquide SA on September 21, 2024 and sell it today you would earn a total of 3,610 from holding Air Liquide SA or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. ROBERTET SA INH
Performance |
| Timeline |
| Air Liquide SA |
| ROBERTET SA INH |
Air Liquide and ROBERTET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and ROBERTET
The main advantage of trading using opposite Air Liquide and ROBERTET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, ROBERTET 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 ROBERTET will offset losses from the drop in ROBERTET's long position.| Air Liquide vs. AIR LIQUIDE ADR | Air Liquide vs. Ganfeng Lithium Co | Air Liquide vs. Superior Plus Corp | Air Liquide vs. SIVERS SEMICONDUCTORS AB |
| ROBERTET vs. Datalogic SpA | ROBERTET vs. INFORMATION SVC GRP | ROBERTET vs. PLAYSTUDIOS A DL 0001 | ROBERTET vs. COLUMBIA SPORTSWEAR |
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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