Correlation Between LAir Liquide and Wang Lee

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

Diversification Opportunities for LAir Liquide and Wang Lee

-0.8

Correlation Coefficient

LAir Liquide  Wang Lee

Pay attention - limited upside

The 3 months correlation between LAir and Wang is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Wang Lee Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wang Lee Group, 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 Wang Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wang Lee Group, has no effect on the direction of LAir Liquide i.e., LAir Liquide and Wang Lee go up and down completely randomly.

Pair Corralation between LAir Liquide and Wang Lee

Assuming the 90 days horizon LAir Liquide SA is expected to under-perform the Wang Lee. But the pink sheet apears to be less risky and, when comparing its historical volatility, LAir Liquide SA is 9.46 times less risky than Wang Lee. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Wang Lee Group, is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Wang Lee Group, on August 30, 2024 and sell it today you would earn a total of  409.00  from holding Wang Lee Group, or generate 705.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

LAir Liquide SA  vs.  Wang Lee Group,

LAir Liquide SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAir Liquide SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

Wang Lee Group,

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wang Lee Group, are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, Wang Lee unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LAir Liquide and Wang Lee

The main advantage of trading using opposite LAir Liquide and Wang Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide position performs unexpectedly, Wang Lee 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 Wang Lee will offset losses from the drop in Wang Lee's long position.

The idea behind LAir Liquide SA and Wang Lee Group, 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.