Correlation Between Qurate Retail and Air Products
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Air Products 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 Qurate Retail and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Air Products Chemicals, you can compare the effects of market volatilities on Qurate Retail and Air Products 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 Qurate Retail with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Air Products.
Diversification Opportunities for Qurate Retail and Air Products
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Qurate and Air is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Qurate Retail i.e., Qurate Retail and Air Products go up and down completely randomly.
Pair Corralation between Qurate Retail and Air Products
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Air Products. But the stock apears to be less risky and, when comparing its historical volatility, Qurate Retail Series is 1.51 times less risky than Air Products. The stock trades about -0.04 of its potential returns per unit of risk. The Air Products Chemicals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20,893 in Air Products Chemicals on November 3, 2024 and sell it today you would earn a total of 12,687 from holding Air Products Chemicals or generate 60.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Qurate Retail Series vs. Air Products Chemicals
Performance |
| Timeline |
| Qurate Retail Series |
| Air Products Chemicals |
Qurate Retail and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Air Products
The main advantage of trading using opposite Qurate Retail and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Air Products 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 Products will offset losses from the drop in Air Products' long position.| Qurate Retail vs. Foresight Environmental Infrastructure | Qurate Retail vs. Symphony Environmental Technologies | Qurate Retail vs. Sabre Insurance Group | Qurate Retail vs. Dentsply Sirona |
| Air Products vs. National Beverage Corp | Air Products vs. Associated British Foods | Air Products vs. CAP LEASE AVIATION | Air Products vs. Geely Automobile Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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