Correlation Between LAir Liquide and International Game
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
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LAir and International is -0.48. 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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LAir Liquide SA vs. International Game Technology
Performance |
Timeline |
LAir Liquide SA |
International Game |
LAir Liquide and International Game Volatility Contrast
Predicted Return Density |
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.LAir Liquide vs. Dalata Hotel Group | ||
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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