Correlation Between LAir Liquide and China Clean
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and China Clean 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 China Clean 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 China Clean Energy, you can compare the effects of market volatilities on LAir Liquide and China Clean 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 China Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and China Clean.
Diversification Opportunities for LAir Liquide and China Clean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LAir and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and China Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Clean Energy 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 China Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Clean Energy has no effect on the direction of LAir Liquide i.e., LAir Liquide and China Clean go up and down completely randomly.
Pair Corralation between LAir Liquide and China Clean
If you would invest 12,515 in LAir Liquide SA on September 2, 2024 and sell it today you would earn a total of 3,819 from holding LAir Liquide SA or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
LAir Liquide SA vs. China Clean Energy
Performance |
| Timeline |
| LAir Liquide SA |
| China Clean Energy |
LAir Liquide and China Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and China Clean
The main advantage of trading using opposite LAir Liquide and China Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, China Clean 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 China Clean will offset losses from the drop in China Clean'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 |
| China Clean vs. Sherwin Williams Co | China Clean vs. Air Liquide SA | China Clean vs. Air Products and | China Clean 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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