Correlation Between Axon Enterprise and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise 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 Axon Enterprise and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and LAir Liquide SA, you can compare the effects of market volatilities on Axon Enterprise 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 Axon Enterprise with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and LAir Liquide.
Diversification Opportunities for Axon Enterprise and LAir Liquide
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axon and LAir is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise 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 Axon Enterprise 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 Axon Enterprise 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 Axon Enterprise i.e., Axon Enterprise and LAir Liquide go up and down completely randomly.
Pair Corralation between Axon Enterprise and LAir Liquide
Given the investment horizon of 90 days Axon Enterprise is expected to generate 3.73 times more return on investment than LAir Liquide. However, Axon Enterprise is 3.73 times more volatile than LAir Liquide SA. It trades about 0.26 of its potential returns per unit of risk. LAir Liquide SA is currently generating about -0.2 per unit of risk. If you would invest 39,526 in Axon Enterprise on August 26, 2024 and sell it today you would earn a total of 24,169 from holding Axon Enterprise or generate 61.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axon Enterprise vs. LAir Liquide SA
Performance |
| Timeline |
| Axon Enterprise |
| LAir Liquide SA |
Axon Enterprise and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and LAir Liquide
The main advantage of trading using opposite Axon Enterprise and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise 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.| Axon Enterprise vs. Novocure | Axon Enterprise vs. HubSpot | Axon Enterprise vs. DigitalOcean Holdings | Axon Enterprise vs. Appian Corp |
| LAir Liquide vs. First Graphene | LAir Liquide vs. HUMANA INC | LAir Liquide vs. Aquagold International | LAir Liquide vs. Barloworld Ltd 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |