Correlation Between Amadeus IT and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and LAir 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 Amadeus IT and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and LAir Liquide SA, you can compare the effects of market volatilities on Amadeus IT and LAir 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 Amadeus IT with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and LAir Liquide.
Diversification Opportunities for Amadeus IT and LAir Liquide
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amadeus and LAir is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide SA and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of Amadeus IT i.e., Amadeus IT and LAir Liquide go up and down completely randomly.
Pair Corralation between Amadeus IT and LAir Liquide
Assuming the 90 days horizon Amadeus IT Group is expected to generate 2.46 times more return on investment than LAir Liquide. However, Amadeus IT is 2.46 times more volatile than LAir Liquide SA. It trades about 0.04 of its potential returns per unit of risk. LAir Liquide SA is currently generating about -0.17 per unit of risk. If you would invest 6,875 in Amadeus IT Group on September 2, 2024 and sell it today you would earn a total of 280.00 from holding Amadeus IT Group or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amadeus IT Group vs. LAir Liquide SA
Performance |
| Timeline |
| Amadeus IT Group |
| LAir Liquide SA |
Amadeus IT and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and LAir Liquide
The main advantage of trading using opposite Amadeus IT and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, LAir 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 LAir Liquide will offset losses from the drop in LAir Liquide's long position.| Amadeus IT vs. Amadeus IT Holding | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
| LAir Liquide vs. Sherwin Williams Co | LAir Liquide vs. Air Liquide SA | LAir Liquide vs. Air Products and | LAir Liquide vs. Ecolab Inc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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