Correlation Between Denison Mines and LAir Liquide

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

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

Diversification Opportunities for Denison Mines and LAir Liquide

-0.9

Correlation Coefficient

Denison Mines  LAir Liquide

Pay attention - limited upside

The 3 months correlation between Denison and LAir is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines Corp and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide SA and Denison Mines 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 Denison Mines Corp are associated (or correlated) with LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of Denison Mines i.e., Denison Mines and LAir Liquide go up and down completely randomly.

Pair Corralation between Denison Mines and LAir Liquide

Considering the 90-day investment horizon Denison Mines Corp is expected to under-perform the LAir Liquide. In addition to that, Denison Mines is 2.79 times more volatile than LAir Liquide SA. It trades about -0.09 of its total potential returns per unit of risk. LAir Liquide SA is currently generating about 0.24 per unit of volatility. If you would invest  16,078  in LAir Liquide SA on December 19, 2024 and sell it today you would earn a total of  3,659  from holding LAir Liquide SA or generate 22.76% return on investment over 90 days.

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

Denison Mines Corp  vs.  LAir Liquide SA

Denison Mines Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Denison Mines Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

LAir Liquide SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LAir Liquide SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, LAir Liquide reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Denison Mines and LAir Liquide

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

The idea behind Denison Mines Corp and LAir 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.