Correlation Between WIZZ AIR and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both WIZZ AIR 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 WIZZ AIR and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and LAir Liquide SA, you can compare the effects of market volatilities on WIZZ AIR 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 WIZZ AIR with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and LAir Liquide.
Diversification Opportunities for WIZZ AIR and LAir Liquide
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIZZ and LAir is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR i.e., WIZZ AIR and LAir Liquide go up and down completely randomly.
Pair Corralation between WIZZ AIR and LAir Liquide
Assuming the 90 days trading horizon WIZZ AIR HLDGUNSPADR4 is expected to under-perform the LAir Liquide. In addition to that, WIZZ AIR is 5.76 times more volatile than LAir Liquide SA. It trades about -0.04 of its total potential returns per unit of risk. LAir Liquide SA is currently generating about 0.04 per unit of volatility. If you would invest 15,886 in LAir Liquide SA on September 13, 2024 and sell it today you would earn a total of 92.00 from holding LAir Liquide SA or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIZZ AIR HLDGUNSPADR4 vs. LAir Liquide SA
Performance |
| Timeline |
| WIZZ AIR HLDGUNSPADR4 |
| LAir Liquide SA |
WIZZ AIR and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIZZ AIR and LAir Liquide
The main advantage of trading using opposite WIZZ AIR and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIZZ AIR 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.| WIZZ AIR vs. RYANAIR HLDGS ADR | WIZZ AIR vs. Ryanair Holdings plc | WIZZ AIR vs. Superior Plus Corp | WIZZ AIR vs. SIVERS SEMICONDUCTORS AB |
| LAir Liquide vs. Apple Inc | LAir Liquide vs. Apple Inc | LAir Liquide vs. Apple Inc | LAir Liquide vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |