Correlation Between Vinci SA and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Vinci SA 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 Vinci SA and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA and Air Liquide SA, you can compare the effects of market volatilities on Vinci SA 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 Vinci SA with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Air Liquide.
Diversification Opportunities for Vinci SA and Air Liquide
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vinci and Air is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA 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 Vinci SA 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 Vinci SA 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 Vinci SA i.e., Vinci SA and Air Liquide go up and down completely randomly.
Pair Corralation between Vinci SA and Air Liquide
Assuming the 90 days horizon Vinci SA is expected to under-perform the Air Liquide. In addition to that, Vinci SA is 1.03 times more volatile than Air Liquide SA. It trades about -0.02 of its total potential returns per unit of risk. Air Liquide SA is currently generating about 0.02 per unit of volatility. If you would invest 15,474 in Air Liquide SA on August 27, 2024 and sell it today you would earn a total of 550.00 from holding Air Liquide SA or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vinci SA vs. Air Liquide SA
Performance |
| Timeline |
| Vinci SA |
| Air Liquide SA |
Vinci SA and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and Air Liquide
The main advantage of trading using opposite Vinci SA and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA 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.| Vinci SA vs. Air Liquide SA | Vinci SA vs. Bouygues SA | Vinci SA vs. AXA SA | Vinci SA vs. Compagnie de Saint Gobain |
| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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