Correlation Between Air Liquide and Air Products
Can any of the company-specific risk be diversified away by investing in both Air Liquide and Air Products 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 Air Liquide and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Liquide SA and Air Products and, you can compare the effects of market volatilities on Air Liquide and Air Products 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 Air Liquide with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Air Products.
Diversification Opportunities for Air Liquide and Air Products
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Air is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Air 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 Air Liquide SA are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Air Liquide i.e., Air Liquide and Air Products go up and down completely randomly.
Pair Corralation between Air Liquide and Air Products
Assuming the 90 days horizon Air Liquide SA is expected to generate 0.85 times more return on investment than Air Products. However, Air Liquide SA is 1.18 times less risky than Air Products. It trades about 0.03 of its potential returns per unit of risk. Air Products and is currently generating about 0.02 per unit of risk. If you would invest 2,822 in Air Liquide SA on September 3, 2024 and sell it today you would earn a total of 503.00 from holding Air Liquide SA or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Liquide SA vs. Air Products and
Performance |
| Timeline |
| Air Liquide SA |
| Air Products |
Air Liquide and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and Air Products
The main advantage of trading using opposite Air Liquide and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Air Liquide vs. Asia Carbon Industries | Air Liquide vs. Akzo Nobel NV | Air Liquide vs. Avoca LLC | Air Liquide vs. AGC Inc ADR |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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