Correlation Between Air Liquide and JSR
Can any of the company-specific risk be diversified away by investing in both Air Liquide and JSR 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 JSR 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 JSR Corporation, you can compare the effects of market volatilities on Air Liquide and JSR 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 JSR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and JSR.
Diversification Opportunities for Air Liquide and JSR
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and JSR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and JSR Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSR Corporation 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 JSR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSR Corporation has no effect on the direction of Air Liquide i.e., Air Liquide and JSR go up and down completely randomly.
Pair Corralation between Air Liquide and JSR
Assuming the 90 days horizon Air Liquide is expected to generate 2.38 times less return on investment than JSR. But when comparing it to its historical volatility, Air Liquide SA is 1.61 times less risky than JSR. It trades about 0.03 of its potential returns per unit of risk. JSR Corporation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,175 in JSR Corporation on September 2, 2024 and sell it today you would earn a total of 640.00 from holding JSR Corporation or generate 29.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 59.07% |
| Values | Daily Returns |
Air Liquide SA vs. JSR Corp.
Performance |
| Timeline |
| Air Liquide SA |
| JSR Corporation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air Liquide and JSR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Liquide and JSR
The main advantage of trading using opposite Air Liquide and JSR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide position performs unexpectedly, JSR 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 will offset losses from the drop in JSR's 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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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