Correlation Between LAir Liquide and Haydale Graphene
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and Haydale Graphene 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 Haydale Graphene 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 Haydale Graphene Industries, you can compare the effects of market volatilities on LAir Liquide and Haydale Graphene 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 Haydale Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Haydale Graphene.
Diversification Opportunities for LAir Liquide and Haydale Graphene
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LAir and Haydale is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Haydale Graphene Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haydale Graphene Ind 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 Haydale Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haydale Graphene Ind has no effect on the direction of LAir Liquide i.e., LAir Liquide and Haydale Graphene go up and down completely randomly.
Pair Corralation between LAir Liquide and Haydale Graphene
Assuming the 90 days horizon LAir Liquide is expected to generate 15.81 times less return on investment than Haydale Graphene. But when comparing it to its historical volatility, LAir Liquide SA is 12.94 times less risky than Haydale Graphene. It trades about 0.05 of its potential returns per unit of risk. Haydale Graphene Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.16 in Haydale Graphene Industries on November 29, 2024 and sell it today you would lose (1.99) from holding Haydale Graphene Industries or give up 92.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAir Liquide SA vs. Haydale Graphene Industries
Performance |
| Timeline |
| LAir Liquide SA |
| Haydale Graphene Ind |
LAir Liquide and Haydale Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Haydale Graphene
The main advantage of trading using opposite LAir Liquide and Haydale Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, Haydale Graphene 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 Haydale Graphene will offset losses from the drop in Haydale Graphene's long position.| LAir Liquide vs. Asia Carbon Industries | LAir Liquide vs. Akzo Nobel NV | LAir Liquide vs. Avoca LLC | LAir Liquide vs. AGC Inc ADR |
| Haydale Graphene vs. Versarien plc | Haydale Graphene vs. Graphene Manufacturing Group | Haydale Graphene vs. Olin Corporation | Haydale Graphene vs. G6 Materials 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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