Correlation Between MeVis Medical and Air Liquide
Can any of the company-specific risk be diversified away by investing in both MeVis Medical 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 MeVis Medical and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and Air Liquide SA, you can compare the effects of market volatilities on MeVis Medical 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 MeVis Medical with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Air Liquide.
Diversification Opportunities for MeVis Medical and Air Liquide
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MeVis and Air is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions 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 MeVis Medical 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 MeVis Medical Solutions 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 MeVis Medical i.e., MeVis Medical and Air Liquide go up and down completely randomly.
Pair Corralation between MeVis Medical and Air Liquide
Assuming the 90 days trading horizon MeVis Medical is expected to generate 106.2 times less return on investment than Air Liquide. But when comparing it to its historical volatility, MeVis Medical Solutions is 1.43 times less risky than Air Liquide. It trades about 0.0 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 15,934 in Air Liquide SA on November 8, 2024 and sell it today you would earn a total of 746.00 from holding Air Liquide SA or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Air Liquide SA
Performance |
| Timeline |
| MeVis Medical Solutions |
| Air Liquide SA |
MeVis Medical and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Air Liquide
The main advantage of trading using opposite MeVis Medical and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical 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.| MeVis Medical vs. Advanced Medical Solutions | MeVis Medical vs. PRECISION DRILLING P | MeVis Medical vs. Japan Medical Dynamic | MeVis Medical vs. WT OFFSHORE |
| Air Liquide vs. Sterling Construction | Air Liquide vs. STRAYER EDUCATION | Air Liquide vs. CHINA EDUCATION GROUP | Air Liquide vs. G8 EDUCATION |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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