Correlation Between AIR LIQUIDE and LION ONE
Can any of the company-specific risk be diversified away by investing in both AIR LIQUIDE and LION ONE 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 LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR LIQUIDE ADR and LION ONE METALS, you can compare the effects of market volatilities on AIR LIQUIDE and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR LIQUIDE and LION ONE.
Diversification Opportunities for AIR LIQUIDE and LION ONE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIR and LION is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AIR LIQUIDE ADR and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 ADR are associated (or correlated) with LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of AIR LIQUIDE i.e., AIR LIQUIDE and LION ONE go up and down completely randomly.
Pair Corralation between AIR LIQUIDE and LION ONE
Assuming the 90 days trading horizon AIR LIQUIDE ADR is expected to generate 0.51 times more return on investment than LION ONE. However, AIR LIQUIDE ADR is 1.98 times less risky than LION ONE. It trades about 0.02 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.1 per unit of risk. If you would invest 2,997 in AIR LIQUIDE ADR on September 14, 2024 and sell it today you would earn a total of 143.00 from holding AIR LIQUIDE ADR or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
AIR LIQUIDE ADR vs. LION ONE METALS
Performance |
| Timeline |
| AIR LIQUIDE ADR |
| LION ONE METALS |
AIR LIQUIDE and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR LIQUIDE and LION ONE
The main advantage of trading using opposite AIR LIQUIDE and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR LIQUIDE position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| AIR LIQUIDE vs. Ganfeng Lithium Co | AIR LIQUIDE vs. Superior Plus Corp | AIR LIQUIDE vs. SIVERS SEMICONDUCTORS AB | AIR LIQUIDE vs. Norsk Hydro ASA |
| LION ONE vs. Chunghwa Telecom Co | LION ONE vs. China Communications Services | LION ONE vs. HOCHSCHILD MINING | LION ONE vs. OURGAME INTHOLDL 00005 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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