Correlation Between LAir Liquide and Givaudan
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and Givaudan 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 Givaudan 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 Givaudan SA ADR, you can compare the effects of market volatilities on LAir Liquide and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Givaudan.
Diversification Opportunities for LAir Liquide and Givaudan
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LAir and Givaudan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Givaudan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA ADR 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA ADR has no effect on the direction of LAir Liquide i.e., LAir Liquide and Givaudan go up and down completely randomly.
Pair Corralation between LAir Liquide and Givaudan
Assuming the 90 days horizon LAir Liquide SA is expected to generate 1.03 times more return on investment than Givaudan. However, LAir Liquide is 1.03 times more volatile than Givaudan SA ADR. It trades about -0.2 of its potential returns per unit of risk. Givaudan SA ADR is currently generating about -0.35 per unit of risk. If you would invest 18,154 in LAir Liquide SA on August 24, 2024 and sell it today you would lose (1,099) from holding LAir Liquide SA or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAir Liquide SA vs. Givaudan SA ADR
Performance |
| Timeline |
| LAir Liquide SA |
| Givaudan SA ADR |
LAir Liquide and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Givaudan
The main advantage of trading using opposite LAir Liquide and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan'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 |
| Givaudan vs. Sherwin Williams Co | Givaudan vs. Air Liquide SA | Givaudan vs. Air Products and | Givaudan 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |