Correlation Between AIR LIQUIDE and PLAYWAY SA

Can any of the company-specific risk be diversified away by investing in both AIR LIQUIDE and PLAYWAY SA 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 AIR LIQUIDE and PLAYWAY SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AIR LIQUIDE ADR and PLAYWAY SA ZY 10, you can compare the effects of market volatilities on AIR LIQUIDE and PLAYWAY SA 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 AIR LIQUIDE with a short position of PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR LIQUIDE and PLAYWAY SA.

Diversification Opportunities for AIR LIQUIDE and PLAYWAY SA

0.47

Correlation Coefficient

AIR LIQUIDE  PLAYWAY SA

Very weak diversification

The 3 months correlation between AIR and PLAYWAY is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AIR LIQUIDE ADR and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA ZY and AIR 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 AIR LIQUIDE ADR are associated (or correlated) with PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of AIR LIQUIDE i.e., AIR LIQUIDE and PLAYWAY SA go up and down completely randomly.

Pair Corralation between AIR LIQUIDE and PLAYWAY SA

Assuming the 90 days trading horizon AIR LIQUIDE ADR is expected to under-perform the PLAYWAY SA. But the stock apears to be less risky and, when comparing its historical volatility, AIR LIQUIDE ADR is 1.92 times less risky than PLAYWAY SA. The stock trades about -0.03 of its potential returns per unit of risk. The PLAYWAY SA ZY 10 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5,909  in PLAYWAY SA ZY 10 on April 23, 2025 and sell it today you would earn a total of  911.00  from holding PLAYWAY SA ZY 10 or generate 15.42% return on investment over 90 days.

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

AIR LIQUIDE ADR  vs.  PLAYWAY SA ZY 10

AIR LIQUIDE ADR

Risk-Adjusted Performance

Weak

Over the last 90 days AIR LIQUIDE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, AIR LIQUIDE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PLAYWAY SA ZY

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYWAY SA ZY 10 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PLAYWAY SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIR LIQUIDE and PLAYWAY SA

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

The idea behind AIR LIQUIDE ADR and PLAYWAY SA ZY 10 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.