Correlation Between LAir Liquide and International Game

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Can any of the company-specific risk be diversified away by investing in both LAir Liquide and International Game 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 LAir Liquide and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAir Liquide SA and International Game Technology, you can compare the effects of market volatilities on LAir Liquide and International Game 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 LAir Liquide with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and International Game.

Diversification Opportunities for LAir Liquide and International Game

LAirInternationalDiversified AwayLAirInternationalDiversified Away100%
-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between LAir and International is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and LAir Liquide 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 LAir Liquide SA are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of LAir Liquide i.e., LAir Liquide and International Game go up and down completely randomly.

Pair Corralation between LAir Liquide and International Game

Assuming the 90 days trading horizon LAir Liquide SA is expected to generate 0.52 times more return on investment than International Game. However, LAir Liquide SA is 1.92 times less risky than International Game. It trades about 0.46 of its potential returns per unit of risk. International Game Technology is currently generating about -0.09 per unit of risk. If you would invest  16,136  in LAir Liquide SA on November 18, 2024 and sell it today you would earn a total of  1,272  from holding LAir Liquide SA or generate 7.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LAir Liquide SA  vs.  International Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15AIL 7IG
       Timeline  
LAir Liquide SA 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in LAir Liquide SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, LAir Liquide may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb155160165170175
International Game 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1616.51717.51818.519

LAir Liquide and International Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.02-2.26-1.5-0.740.01260.811.632.443.25 0.10.20.30.4
JavaScript chart by amCharts 3.21.15AIL 7IG
       Returns  

Pair Trading with LAir Liquide and International Game

The main advantage of trading using opposite LAir Liquide and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.
The idea behind LAir Liquide SA and International Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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