Correlation Between Thales SA and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Thales 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 Thales 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 Thales SA and Air Liquide SA, you can compare the effects of market volatilities on Thales 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 Thales SA with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thales SA and Air Liquide.
Diversification Opportunities for Thales SA and Air Liquide
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thales and Air is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Thales 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 Thales 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 Thales 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 Thales SA i.e., Thales SA and Air Liquide go up and down completely randomly.
Pair Corralation between Thales SA and Air Liquide
Assuming the 90 days horizon Thales SA is expected to generate 1.02 times less return on investment than Air Liquide. In addition to that, Thales SA is 1.33 times more volatile than Air Liquide SA. It trades about 0.04 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 12,304 in Air Liquide SA on August 24, 2024 and sell it today you would earn a total of 3,720 from holding Air Liquide SA or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thales SA vs. Air Liquide SA
Performance |
| Timeline |
| Thales SA |
| Air Liquide SA |
Thales SA and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thales SA and Air Liquide
The main advantage of trading using opposite Thales SA and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales 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.| Thales SA vs. Safran SA | Thales SA vs. Dassault Systemes SE | Thales SA vs. Dassault Aviation SA | Thales SA vs. Vinci SA |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |