Correlation Between Air Liquide and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both Air Liquide and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on Air Liquide and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and SIVERS SEMICONDUCTORS.
Diversification Opportunities for Air Liquide and SIVERS SEMICONDUCTORS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and SIVERS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIVERS SEMICONDUCTORS has no effect on the direction of Air Liquide i.e., Air Liquide and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between Air Liquide and SIVERS SEMICONDUCTORS
Assuming the 90 days trading horizon Air Liquide SA is expected to generate 0.17 times more return on investment than SIVERS SEMICONDUCTORS. However, Air Liquide SA is 5.78 times less risky than SIVERS SEMICONDUCTORS. It trades about -0.04 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about -0.03 per unit of risk. If you would invest 16,756 in Air Liquide SA on September 1, 2024 and sell it today you would lose (1,020) from holding Air Liquide SA or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Air Liquide SA vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| Air Liquide SA |
| SIVERS SEMICONDUCTORS |
Air Liquide and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite Air Liquide and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS will offset losses from the drop in SIVERS SEMICONDUCTORS's long position.| Air Liquide vs. Federal Agricultural Mortgage | Air Liquide vs. SIEM OFFSHORE NEW | Air Liquide vs. H FARM SPA | Air Liquide vs. SOLSTAD OFFSHORE NK |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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