Correlation Between Air Products and Poxel SA
Can any of the company-specific risk be diversified away by investing in both Air Products and Poxel SA 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 Poxel SA 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 Poxel SA, you can compare the effects of market volatilities on Air Products and Poxel SA 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 Poxel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Poxel SA.
Diversification Opportunities for Air Products and Poxel SA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Poxel is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA 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 Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of Air Products i.e., Air Products and Poxel SA go up and down completely randomly.
Pair Corralation between Air Products and Poxel SA
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.18 times more return on investment than Poxel SA. However, Air Products Chemicals is 5.48 times less risky than Poxel SA. It trades about 0.03 of its potential returns per unit of risk. Poxel SA is currently generating about -0.44 per unit of risk. If you would invest 31,042 in Air Products Chemicals on September 13, 2024 and sell it today you would earn a total of 176.00 from holding Air Products Chemicals or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Products Chemicals vs. Poxel SA
Performance |
| Timeline |
| Air Products Chemicals |
| Poxel SA |
Air Products and Poxel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Poxel SA
The main advantage of trading using opposite Air Products and Poxel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Poxel SA 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 Poxel SA will offset losses from the drop in Poxel SA's long position.| Air Products vs. Oakley Capital Investments | Air Products vs. Aurora Investment Trust | Air Products vs. New Residential Investment | Air Products vs. Liontrust Asset Management |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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