Correlation Between G6 Materials and Air Liquide
Can any of the company-specific risk be diversified away by investing in both G6 Materials 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 G6 Materials and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G6 Materials Corp and Air Liquide SA, you can compare the effects of market volatilities on G6 Materials 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 G6 Materials with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of G6 Materials and Air Liquide.
Diversification Opportunities for G6 Materials and Air Liquide
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GPHBF and Air is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding G6 Materials Corp 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 G6 Materials 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 G6 Materials Corp 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 G6 Materials i.e., G6 Materials and Air Liquide go up and down completely randomly.
Pair Corralation between G6 Materials and Air Liquide
Assuming the 90 days horizon G6 Materials Corp is expected to generate 43.76 times more return on investment than Air Liquide. However, G6 Materials is 43.76 times more volatile than Air Liquide SA. It trades about 0.06 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.03 per unit of risk. If you would invest 35.00 in G6 Materials Corp on September 4, 2024 and sell it today you would lose (32.75) from holding G6 Materials Corp or give up 93.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G6 Materials Corp vs. Air Liquide SA
Performance |
| Timeline |
| G6 Materials Corp |
| Air Liquide SA |
G6 Materials and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G6 Materials and Air Liquide
The main advantage of trading using opposite G6 Materials and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G6 Materials 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.| G6 Materials vs. Versarien plc | G6 Materials vs. Graphene Manufacturing Group | G6 Materials vs. 5E Advanced Materials | G6 Materials vs. Haydale Graphene Industries |
| Air Liquide vs. Asia Carbon Industries | Air Liquide vs. Akzo Nobel NV | Air Liquide vs. Avoca LLC | Air Liquide vs. AGC Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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