Correlation Between LAir Liquide and JSR Corp
Can any of the company-specific risk be diversified away by investing in both LAir Liquide and JSR Corp 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 JSR Corp 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 JSR Corp, you can compare the effects of market volatilities on LAir Liquide and JSR Corp 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 JSR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and JSR Corp.
Diversification Opportunities for LAir Liquide and JSR Corp
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LAir and JSR is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and JSR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSR Corp 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 JSR Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSR Corp has no effect on the direction of LAir Liquide i.e., LAir Liquide and JSR Corp go up and down completely randomly.
Pair Corralation between LAir Liquide and JSR Corp
Assuming the 90 days horizon LAir Liquide SA is expected to under-perform the JSR Corp. In addition to that, LAir Liquide is 6.9 times more volatile than JSR Corp. It trades about -0.17 of its total potential returns per unit of risk. JSR Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,510 in JSR Corp on September 2, 2024 and sell it today you would earn a total of 16.00 from holding JSR Corp or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 59.38% |
| Values | Daily Returns |
LAir Liquide SA vs. JSR Corp
Performance |
| Timeline |
| LAir Liquide SA |
| JSR Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
LAir Liquide and JSR Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and JSR Corp
The main advantage of trading using opposite LAir Liquide and JSR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, JSR Corp 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 JSR Corp will offset losses from the drop in JSR Corp'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 |
| JSR Corp vs. Orion Engineered Carbons | JSR Corp vs. Select Energy Services | JSR Corp vs. Perimeter Solutions SA | JSR Corp vs. FutureFuel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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