Correlation Between Air Products and Systemair
Can any of the company-specific risk be diversified away by investing in both Air Products and Systemair 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 Systemair 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 Systemair AB, you can compare the effects of market volatilities on Air Products and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Systemair.
Diversification Opportunities for Air Products and Systemair
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Systemair is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Air Products i.e., Air Products and Systemair go up and down completely randomly.
Pair Corralation between Air Products and Systemair
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 3.09 times more return on investment than Systemair. However, Air Products is 3.09 times more volatile than Systemair AB. It trades about 0.04 of its potential returns per unit of risk. Systemair AB is currently generating about 0.06 per unit of risk. If you would invest 26,968 in Air Products Chemicals on August 25, 2024 and sell it today you would earn a total of 6,103 from holding Air Products Chemicals or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.98% |
| Values | Daily Returns |
Air Products Chemicals vs. Systemair AB
Performance |
| Timeline |
| Air Products Chemicals |
| Systemair AB |
Air Products and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Systemair
The main advantage of trading using opposite Air Products and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Air Products vs. Quadrise Plc | Air Products vs. Intuitive Investments Group | Air Products vs. European Metals Holdings | Air Products vs. Athelney Trust plc |
| Systemair vs. X FAB Silicon Foundries | Systemair vs. Darden Restaurants | Systemair vs. Summit Materials Cl | Systemair vs. Take Two Interactive Software |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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