Correlation Between Air Products and Public Storage
Can any of the company-specific risk be diversified away by investing in both Air Products and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Air Products and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Public Storage.
Diversification Opportunities for Air Products and Public Storage
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Public is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Air Products i.e., Air Products and Public Storage go up and down completely randomly.
Pair Corralation between Air Products and Public Storage
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 3.75 times more return on investment than Public Storage. However, Air Products is 3.75 times more volatile than Public Storage. It trades about 0.03 of its potential returns per unit of risk. Public Storage is currently generating about 0.03 per unit of risk. If you would invest 29,572 in Air Products Chemicals on August 29, 2024 and sell it today you would earn a total of 3,759 from holding Air Products Chemicals or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Air Products Chemicals vs. Public Storage
Performance |
| Timeline |
| Air Products Chemicals |
| Public Storage |
Air Products and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Public Storage
The main advantage of trading using opposite Air Products and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Air Products vs. Impax Environmental Markets | Air Products vs. JD Sports Fashion | Air Products vs. Seche Environnement SA | Air Products vs. Lowland Investment Co |
| Public Storage vs. Foresight Environmental Infrastructure | Public Storage vs. Summit Materials Cl | Public Storage vs. AfriTin Mining | Public Storage vs. Blackrock World Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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