Correlation Between Air Liquide and Accor SA
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Accor SA 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 Accor SA 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 Accor SA, you can compare the effects of market volatilities on Air Liquide and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Accor SA.
Diversification Opportunities for Air Liquide and Accor SA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Accor is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor 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 Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of Air Liquide i.e., Air Liquide and Accor SA go up and down completely randomly.
Pair Corralation between Air Liquide and Accor SA
Assuming the 90 days horizon Air Liquide SA is expected to under-perform the Accor SA. But the stock apears to be less risky and, when comparing its historical volatility, Air Liquide SA is 1.14 times less risky than Accor SA. The stock trades about -0.33 of its potential returns per unit of risk. The Accor SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,193 in Accor SA on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Accor SA or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. Accor SA
Performance |
| Timeline |
| Air Liquide SA |
| Accor SA |
Air Liquide and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Accor SA
The main advantage of trading using opposite Air Liquide and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| Air Liquide vs. Superior Plus Corp | Air Liquide vs. NMI Holdings | Air Liquide vs. Origin Agritech | Air Liquide vs. SIVERS SEMICONDUCTORS AB |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |