Correlation Between Arbe Robotics and LAir Liquide

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Can any of the company-specific risk be diversified away by investing in both Arbe Robotics 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 Arbe Robotics and LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbe Robotics and LAir Liquide ADR, you can compare the effects of market volatilities on Arbe Robotics 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 Arbe Robotics with a short position of LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbe Robotics and LAir Liquide.

Diversification Opportunities for Arbe Robotics and LAir Liquide

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Arbe Robotics and AIQUY is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics and LAir Liquide ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide ADR and Arbe Robotics 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 Arbe Robotics 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 ADR has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and LAir Liquide go up and down completely randomly.

Pair Corralation between Arbe Robotics and LAir Liquide

Given the investment horizon of 90 days Arbe Robotics is expected to under-perform the LAir Liquide. In addition to that, Arbe Robotics is 1.86 times more volatile than LAir Liquide ADR. It trades about -0.19 of its total potential returns per unit of risk. LAir Liquide ADR is currently generating about 0.31 per unit of volatility. If you would invest  2,612  in LAir Liquide ADR on August 28, 2022 and sell it today you would earn a total of  328.00  from holding LAir Liquide ADR or generate 12.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Arbe Robotics  vs.  LAir Liquide ADR

 Performance (%) 
       Timeline  
Arbe Robotics 
Arbe Robotics Performance
0 of 100
Over the last 90 days Arbe Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in December 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Arbe Robotics Price Channel

LAir Liquide ADR 
AIQUY Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in LAir Liquide ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, LAir Liquide showed solid returns over the last few months and may actually be approaching a breakup point.

AIQUY Price Channel

Arbe Robotics and LAir Liquide Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arbe Robotics and LAir Liquide

The main advantage of trading using opposite Arbe Robotics and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbe Robotics 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.
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The idea behind Arbe Robotics and LAir Liquide ADR 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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