Correlation Between Baikowski SASU and Air Liquide

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

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

Diversification Opportunities for Baikowski SASU and Air Liquide

-0.9

Correlation Coefficient

Baikowski SASU  Air Liquide

Pay attention - limited upside

The 3 months correlation between Baikowski and Air is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Baikowski SASU 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 Baikowski SASU 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 Baikowski SASU 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 Baikowski SASU i.e., Baikowski SASU and Air Liquide go up and down completely randomly.

Pair Corralation between Baikowski SASU and Air Liquide

Assuming the 90 days trading horizon Baikowski SASU is expected to under-perform the Air Liquide. In addition to that, Baikowski SASU is 1.76 times more volatile than Air Liquide SA. It trades about -0.04 of its total potential returns per unit of risk. Air Liquide SA is currently generating about 0.05 per unit of volatility. If you would invest  13,884  in Air Liquide SA on January 31, 2024 and sell it today you would earn a total of  4,556  from holding Air Liquide SA or generate 32.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Baikowski SASU  vs.  Air Liquide SA

Baikowski SASU

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baikowski SASU has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Air Liquide SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Liquide SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Air Liquide may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Baikowski SASU and Air Liquide

The main advantage of trading using opposite Baikowski SASU and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baikowski SASU 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 Baikowski SASU 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.