Correlation Between LAir Liquide and Iofina Plc
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and Iofina Plc 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 Iofina Plc 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 Iofina plc, you can compare the effects of market volatilities on LAir Liquide and Iofina Plc 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 Iofina Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Iofina Plc.
Diversification Opportunities for LAir Liquide and Iofina Plc
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LAir and Iofina is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc 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 Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of LAir Liquide i.e., LAir Liquide and Iofina Plc go up and down completely randomly.
Pair Corralation between LAir Liquide and Iofina Plc
Assuming the 90 days horizon LAir Liquide SA is expected to under-perform the Iofina Plc. But the pink sheet apears to be less risky and, when comparing its historical volatility, LAir Liquide SA is 2.82 times less risky than Iofina Plc. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Iofina plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Iofina plc on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Iofina plc or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAir Liquide SA vs. Iofina plc
Performance |
| Timeline |
| LAir Liquide SA |
| Iofina plc |
LAir Liquide and Iofina Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Iofina Plc
The main advantage of trading using opposite LAir Liquide and Iofina Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, Iofina Plc 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 Iofina Plc will offset losses from the drop in Iofina Plc'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 |
| Iofina Plc vs. Sherwin Williams Co | Iofina Plc vs. Air Liquide SA | Iofina Plc vs. LAir Liquide SA | Iofina Plc vs. Air Products and |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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