Correlation Between Air Transport and AIR LIQUIDE
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and AIR LIQUIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and AIR LIQUIDE ADR, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of AIR LIQUIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and AIR LIQUIDE.
Diversification Opportunities for Air Transport and AIR LIQUIDE
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and AIR is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR and Air Transport 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 Transport Services 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 ADR has no effect on the direction of Air Transport i.e., Air Transport and AIR LIQUIDE go up and down completely randomly.
Pair Corralation between Air Transport and AIR LIQUIDE
Assuming the 90 days horizon Air Transport Services is expected to generate 2.87 times more return on investment than AIR LIQUIDE. However, Air Transport is 2.87 times more volatile than AIR LIQUIDE ADR. It trades about 0.16 of its potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about -0.04 per unit of risk. If you would invest 1,470 in Air Transport Services on August 28, 2024 and sell it today you would earn a total of 610.00 from holding Air Transport Services or generate 41.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. AIR LIQUIDE ADR
Performance |
| Timeline |
| Air Transport Services |
| AIR LIQUIDE ADR |
Air Transport and AIR LIQUIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and AIR LIQUIDE
The main advantage of trading using opposite Air Transport and AIR LIQUIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AerCap Holdings NV | Air Transport vs. Grupo Aeroportuario del |
| AIR LIQUIDE vs. Superior Plus Corp | AIR LIQUIDE vs. NMI Holdings | AIR LIQUIDE vs. Origin Agritech | AIR LIQUIDE vs. SIVERS SEMICONDUCTORS AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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