Correlation Between Air Products and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Air Products and Austevoll Seafood 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 Products and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products Chemicals and Austevoll Seafood ASA, you can compare the effects of market volatilities on Air Products and Austevoll Seafood 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 Products with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Austevoll Seafood.
Diversification Opportunities for Air Products and Austevoll Seafood
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Austevoll is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Air Products 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 Products Chemicals are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Air Products i.e., Air Products and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Air Products and Austevoll Seafood
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.95 times more return on investment than Austevoll Seafood. However, Air Products Chemicals is 1.05 times less risky than Austevoll Seafood. It trades about 0.6 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.28 per unit of risk. If you would invest 28,245 in Air Products Chemicals on November 7, 2024 and sell it today you would earn a total of 5,335 from holding Air Products Chemicals or generate 18.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Air Products Chemicals vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Air Products Chemicals |
| Austevoll Seafood ASA |
Air Products and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Austevoll Seafood
The main advantage of trading using opposite Air Products and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| Air Products vs. Rheinmetall AG | Air Products vs. Golden Metal Resources | Air Products vs. Veolia Environnement VE | Air Products vs. Europa Metals |
| Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Toyota Motor Corp | Austevoll Seafood vs. Reliance Industries Ltd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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