Correlation Between Air Liquide and NEO PERFORMMAT
Can any of the company-specific risk be diversified away by investing in both Air Liquide and NEO PERFORMMAT 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 NEO PERFORMMAT 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 NEO PERFORMMAT, you can compare the effects of market volatilities on Air Liquide and NEO PERFORMMAT 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 NEO PERFORMMAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and NEO PERFORMMAT.
Diversification Opportunities for Air Liquide and NEO PERFORMMAT
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and NEO is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and NEO PERFORMMAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO PERFORMMAT 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 NEO PERFORMMAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO PERFORMMAT has no effect on the direction of Air Liquide i.e., Air Liquide and NEO PERFORMMAT go up and down completely randomly.
Pair Corralation between Air Liquide and NEO PERFORMMAT
Assuming the 90 days trading horizon Air Liquide SA is expected to generate 0.37 times more return on investment than NEO PERFORMMAT. However, Air Liquide SA is 2.7 times less risky than NEO PERFORMMAT. It trades about 0.04 of its potential returns per unit of risk. NEO PERFORMMAT is currently generating about 0.0 per unit of risk. If you would invest 12,620 in Air Liquide SA on September 26, 2024 and sell it today you would earn a total of 2,802 from holding Air Liquide SA or generate 22.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Air Liquide SA vs. NEO PERFORMMAT
Performance |
| Timeline |
| Air Liquide SA |
| NEO PERFORMMAT |
Air Liquide and NEO PERFORMMAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and NEO PERFORMMAT
The main advantage of trading using opposite Air Liquide and NEO PERFORMMAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, NEO PERFORMMAT 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 NEO PERFORMMAT will offset losses from the drop in NEO PERFORMMAT's long position.| Air Liquide vs. Haier Smart Home | Air Liquide vs. Neinor Homes SA | Air Liquide vs. SOUTHWEST AIRLINES | Air Liquide vs. SINGAPORE AIRLINES |
| NEO PERFORMMAT vs. Linde PLC | NEO PERFORMMAT vs. Air Liquide SA | NEO PERFORMMAT vs. The Sherwin Williams | NEO PERFORMMAT vs. Ecolab Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |