Correlation Between LAir Liquide and T-MOBILE

Can any of the company-specific risk be diversified away by investing in both LAir Liquide and T-MOBILE 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 T-MOBILE 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 T MOBILE INCDL 00001, you can compare the effects of market volatilities on LAir Liquide and T-MOBILE 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 T-MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and T-MOBILE.

Diversification Opportunities for LAir Liquide and T-MOBILE

0.81

Correlation Coefficient

LAir Liquide  T-MOBILE

Very poor diversification

The 3 months correlation between LAir and T-MOBILE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and T MOBILE INCDL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE INCDL 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 T-MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T MOBILE INCDL has no effect on the direction of LAir Liquide i.e., LAir Liquide and T-MOBILE go up and down completely randomly.

Pair Corralation between LAir Liquide and T-MOBILE

Assuming the 90 days trading horizon LAir Liquide SA is expected to generate 0.57 times more return on investment than T-MOBILE. However, LAir Liquide SA is 1.74 times less risky than T-MOBILE. It trades about 0.17 of its potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about 0.08 per unit of risk. If you would invest  16,058  in LAir Liquide SA on December 3, 2024 and sell it today you would earn a total of  1,934  from holding LAir Liquide SA or generate 12.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

LAir Liquide SA  vs.  T MOBILE INCDL 00001

LAir Liquide SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LAir Liquide SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, LAir Liquide may actually be approaching a critical reversion point that can send shares even higher in April 2025.

T MOBILE INCDL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, T-MOBILE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LAir Liquide and T-MOBILE

The main advantage of trading using opposite LAir Liquide and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, T-MOBILE 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 T-MOBILE will offset losses from the drop in T-MOBILE's long position.

The idea behind LAir Liquide SA and T MOBILE INCDL 00001 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.