Correlation Between Kronos Worldwide and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Kronos Worldwide 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 Kronos Worldwide and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Worldwide and LAir Liquide SA, you can compare the effects of market volatilities on Kronos Worldwide 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 Kronos Worldwide with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Worldwide and LAir Liquide.
Diversification Opportunities for Kronos Worldwide and LAir Liquide
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kronos and LAir is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide i.e., Kronos Worldwide and LAir Liquide go up and down completely randomly.
Pair Corralation between Kronos Worldwide and LAir Liquide
Considering the 90-day investment horizon Kronos Worldwide is expected to generate 1.84 times more return on investment than LAir Liquide. However, Kronos Worldwide is 1.84 times more volatile than LAir Liquide SA. It trades about 0.03 of its potential returns per unit of risk. LAir Liquide SA is currently generating about 0.0 per unit of risk. If you would invest 923.00 in Kronos Worldwide on September 12, 2024 and sell it today you would earn a total of 118.00 from holding Kronos Worldwide or generate 12.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Kronos Worldwide vs. LAir Liquide SA
Performance |
Timeline |
Kronos Worldwide |
LAir Liquide SA |
Kronos Worldwide and LAir Liquide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kronos Worldwide and LAir Liquide
The main advantage of trading using opposite Kronos Worldwide and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Worldwide 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.Kronos Worldwide vs. Griffon | Kronos Worldwide vs. Merck Company | Kronos Worldwide vs. Brinker International | Kronos Worldwide vs. Alcoa Corp |
LAir Liquide vs. Chemours Co | LAir Liquide vs. International Flavors Fragrances | LAir Liquide vs. Air Products and | LAir Liquide vs. PPG Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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