Correlation Between LAir Liquide and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and Amadeus IT 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 LAir Liquide and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAir Liquide SA and Amadeus IT Group, you can compare the effects of market volatilities on LAir Liquide and Amadeus IT 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 LAir Liquide with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Amadeus IT.
Diversification Opportunities for LAir Liquide and Amadeus IT
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between LAir and Amadeus is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and LAir 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 LAir Liquide SA are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of LAir Liquide i.e., LAir Liquide and Amadeus IT go up and down completely randomly.
Pair Corralation between LAir Liquide and Amadeus IT
Assuming the 90 days horizon LAir Liquide is expected to generate 1.64 times less return on investment than Amadeus IT. But when comparing it to its historical volatility, LAir Liquide SA is 2.03 times less risky than Amadeus IT. It trades about 0.05 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,217 in Amadeus IT Group on September 2, 2024 and sell it today you would earn a total of 1,938 from holding Amadeus IT Group or generate 37.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
LAir Liquide SA vs. Amadeus IT Group
Performance |
| Timeline |
| LAir Liquide SA |
| Amadeus IT Group |
LAir Liquide and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Amadeus IT
The main advantage of trading using opposite LAir Liquide and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| LAir Liquide vs. Sherwin Williams Co | LAir Liquide vs. Air Liquide SA | LAir Liquide vs. Air Products and | LAir Liquide vs. Ecolab Inc |
| Amadeus IT vs. Amadeus IT Holding | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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