Correlation Between Akzo Nobel and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Akzo Nobel and Air Liquide 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 Akzo Nobel and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akzo Nobel NV and Air Liquide SA, you can compare the effects of market volatilities on Akzo Nobel and Air Liquide 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 Akzo Nobel with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akzo Nobel and Air Liquide.
Diversification Opportunities for Akzo Nobel and Air Liquide
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Akzo and Air is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Akzo Nobel NV and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA and Akzo Nobel 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 Akzo Nobel NV are associated (or correlated) with Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Akzo Nobel i.e., Akzo Nobel and Air Liquide go up and down completely randomly.
Pair Corralation between Akzo Nobel and Air Liquide
Assuming the 90 days horizon Akzo Nobel NV is expected to generate 1.09 times more return on investment than Air Liquide. However, Akzo Nobel is 1.09 times more volatile than Air Liquide SA. It trades about 0.15 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.03 per unit of risk. If you would invest 2,301 in Akzo Nobel NV on September 3, 2024 and sell it today you would earn a total of 224.00 from holding Akzo Nobel NV or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.28% |
| Values | Daily Returns |
Akzo Nobel NV vs. Air Liquide SA
Performance |
| Timeline |
| Akzo Nobel NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Air Liquide SA |
Akzo Nobel and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akzo Nobel and Air Liquide
The main advantage of trading using opposite Akzo Nobel and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akzo Nobel position performs unexpectedly, Air Liquide 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 Liquide will offset losses from the drop in Air Liquide's long position.| Akzo Nobel vs. Air Liquide SA | Akzo Nobel vs. BASF SE ADR | Akzo Nobel vs. Symrise Ag PK | Akzo Nobel vs. Asahi Kaisei Corp |
| Air Liquide vs. Asia Carbon Industries | Air Liquide vs. Akzo Nobel NV | Air Liquide vs. Avoca LLC | Air Liquide vs. AGC Inc ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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