Correlation Between LAir Liquide and Rogers Communications

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

Diversification Opportunities for LAir Liquide and Rogers Communications

-0.54

Correlation Coefficient

LAir Liquide  Rogers Communications

Excellent diversification

The 3 months correlation between LAir and Rogers is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of LAir Liquide i.e., LAir Liquide and Rogers Communications go up and down completely randomly.

Pair Corralation between LAir Liquide and Rogers Communications

Assuming the 90 days trading horizon LAir Liquide SA is expected to under-perform the Rogers Communications. But the stock apears to be less risky and, when comparing its historical volatility, LAir Liquide SA is 1.63 times less risky than Rogers Communications. The stock trades about -0.05 of its potential returns per unit of risk. The Rogers Communications is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2,170  in Rogers Communications on April 24, 2025 and sell it today you would earn a total of  650.00  from holding Rogers Communications or generate 29.95% return on investment over 90 days.

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

LAir Liquide SA  vs.  Rogers Communications

LAir Liquide SA

Risk-Adjusted Performance

Very Weak

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

Rogers Communications

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rogers Communications are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Rogers Communications reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LAir Liquide and Rogers Communications

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

The idea behind LAir Liquide SA and Rogers Communications 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.