Correlation Between China Southern and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both China Southern 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 China Southern and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Southern Airlines and LAir Liquide SA, you can compare the effects of market volatilities on China Southern 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 China Southern with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and LAir Liquide.
Diversification Opportunities for China Southern and LAir Liquide
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and LAir is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines 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 China Southern 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 China Southern Airlines 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 China Southern i.e., China Southern and LAir Liquide go up and down completely randomly.
Pair Corralation between China Southern and LAir Liquide
If you would invest 3,697 in China Southern Airlines on August 30, 2024 and sell it today you would earn a total of 0.00 from holding China Southern Airlines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
China Southern Airlines vs. LAir Liquide SA
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LAir Liquide SA |
China Southern and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and LAir Liquide
The main advantage of trading using opposite China Southern and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern 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.| China Southern vs. LAir Liquide SA | China Southern vs. Corporacion America Airports | China Southern vs. Mayfair Gold Corp | China Southern vs. Insteel Industries |
| LAir Liquide vs. Akzo Nobel NV | LAir Liquide vs. Avoca LLC | LAir Liquide vs. Arkema SA ADR | LAir Liquide vs. HUMANA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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