Correlation Between Givaudan and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Givaudan 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 Givaudan and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and LAir Liquide SA, you can compare the effects of market volatilities on Givaudan 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 Givaudan with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and LAir Liquide.
Diversification Opportunities for Givaudan and LAir Liquide
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Givaudan and LAir is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA 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 Givaudan 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 Givaudan SA 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 Givaudan i.e., Givaudan and LAir Liquide go up and down completely randomly.
Pair Corralation between Givaudan and LAir Liquide
Assuming the 90 days horizon Givaudan SA is expected to generate 1.91 times more return on investment than LAir Liquide. However, Givaudan is 1.91 times more volatile than LAir Liquide SA. It trades about -0.03 of its potential returns per unit of risk. LAir Liquide SA is currently generating about -0.16 per unit of risk. If you would invest 428,200 in Givaudan SA on September 12, 2025 and sell it today you would lose (23,872) from holding Givaudan SA or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Givaudan SA vs. LAir Liquide SA
Performance |
| Timeline |
| Givaudan SA |
| LAir Liquide SA |
Givaudan and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and LAir Liquide
The main advantage of trading using opposite Givaudan and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan 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.| Givaudan vs. PT Chandra Asri | Givaudan vs. HeidelbergCement AG | Givaudan vs. Sika AG ADR | Givaudan vs. Sika AG |
| LAir Liquide vs. Zijin Mining Group | LAir Liquide vs. Rio Tinto Group | LAir Liquide vs. Givaudan SA ADR | LAir Liquide vs. Givaudan SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |