Correlation Between Spirent Communications and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Air Liquide SA, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Air Liquide.
Diversification Opportunities for Spirent Communications and Air Liquide
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spirent and Air is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc 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 Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and Air Liquide go up and down completely randomly.
Pair Corralation between Spirent Communications and Air Liquide
Assuming the 90 days horizon Spirent Communications is expected to generate 98.43 times less return on investment than Air Liquide. In addition to that, Spirent Communications is 3.09 times more volatile than Air Liquide SA. It trades about 0.0 of its total potential returns per unit of risk. Air Liquide SA is currently generating about 0.05 per unit of volatility. If you would invest 11,852 in Air Liquide SA on September 5, 2024 and sell it today you would earn a total of 4,162 from holding Air Liquide SA or generate 35.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. Air Liquide SA
Performance |
| Timeline |
| Spirent Communications |
| Air Liquide SA |
Spirent Communications and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Air Liquide
The main advantage of trading using opposite Spirent Communications and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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.| Spirent Communications vs. T Mobile | Spirent Communications vs. China Mobile Limited | Spirent Communications vs. ATT Inc | Spirent Communications vs. Nippon Telegraph and |
| Air Liquide vs. The Sherwin Williams | Air Liquide vs. Dupont De Nemours | Air Liquide vs. Superior Plus Corp | Air Liquide vs. NMI Holdings |
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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |