Correlation Between Air Products and Ren Redes
Can any of the company-specific risk be diversified away by investing in both Air Products and Ren Redes 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 Ren Redes 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 Ren Redes Energeticas, you can compare the effects of market volatilities on Air Products and Ren Redes 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 Ren Redes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Ren Redes.
Diversification Opportunities for Air Products and Ren Redes
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Ren is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Ren Redes Energeticas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ren Redes Energeticas 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 Ren Redes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ren Redes Energeticas has no effect on the direction of Air Products i.e., Air Products and Ren Redes go up and down completely randomly.
Pair Corralation between Air Products and Ren Redes
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 1.2 times more return on investment than Ren Redes. However, Air Products is 1.2 times more volatile than Ren Redes Energeticas. It trades about 0.26 of its potential returns per unit of risk. Ren Redes Energeticas is currently generating about 0.25 per unit of risk. If you would invest 31,266 in Air Products Chemicals on August 31, 2024 and sell it today you would earn a total of 2,058 from holding Air Products Chemicals or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Ren Redes Energeticas
Performance |
| Timeline |
| Air Products Chemicals |
| Ren Redes Energeticas |
Air Products and Ren Redes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Ren Redes
The main advantage of trading using opposite Air Products and Ren Redes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Ren Redes 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 Ren Redes will offset losses from the drop in Ren Redes' long position.| Air Products vs. Neometals | Air Products vs. Coor Service Management | Air Products vs. Aeorema Communications Plc | Air Products vs. JLEN Environmental Assets |
| Ren Redes vs. Allianz Technology Trust | Ren Redes vs. Extra Space Storage | Ren Redes vs. Celebrus Technologies plc | Ren Redes vs. Deltex Medical Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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