Correlation Between Coor Service and Air Liquide

Can any of the company-specific risk be diversified away by investing in both Coor Service and Air 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 Coor Service and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coor Service Management and Air Liquide SA, you can compare the effects of market volatilities on Coor Service and Air 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 Coor Service with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Air Liquide.

Diversification Opportunities for Coor Service and Air Liquide

0.77

Correlation Coefficient

Coor Service  Air Liquide

Poor diversification

The 3 months correlation between Coor and Air is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA and Coor Service 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 Coor Service Management are associated (or correlated) with Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Coor Service i.e., Coor Service and Air Liquide go up and down completely randomly.

Pair Corralation between Coor Service and Air Liquide

Assuming the 90 days horizon Coor Service Management is expected to under-perform the Air Liquide. In addition to that, Coor Service is 3.89 times more volatile than Air Liquide SA. It trades about -0.08 of its total potential returns per unit of risk. Air Liquide SA is currently generating about 0.25 per unit of volatility. If you would invest  15,422  in Air Liquide SA on October 24, 2024 and sell it today you would earn a total of  674.00  from holding Air Liquide SA or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Coor Service Management  vs.  Air Liquide SA

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Air Liquide SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air Liquide SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Air Liquide is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Coor Service and Air Liquide

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

The idea behind Coor Service Management and Air Liquide SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.