Correlation Between Air Products and Athelney Trust
Can any of the company-specific risk be diversified away by investing in both Air Products and Athelney Trust 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 Athelney Trust 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 Athelney Trust plc, you can compare the effects of market volatilities on Air Products and Athelney Trust 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 Athelney Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Athelney Trust.
Diversification Opportunities for Air Products and Athelney Trust
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Athelney is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Athelney Trust plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athelney Trust plc 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 Athelney Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athelney Trust plc has no effect on the direction of Air Products i.e., Air Products and Athelney Trust go up and down completely randomly.
Pair Corralation between Air Products and Athelney Trust
Assuming the 90 days trading horizon Air Products Chemicals is expected to under-perform the Athelney Trust. But the stock apears to be less risky and, when comparing its historical volatility, Air Products Chemicals is 1.45 times less risky than Athelney Trust. The stock trades about -0.1 of its potential returns per unit of risk. The Athelney Trust plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 16,166 in Athelney Trust plc on January 18, 2025 and sell it today you would lose (666.00) from holding Athelney Trust plc or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Air Products Chemicals vs. Athelney Trust plc
Performance |
| Timeline |
| Air Products Chemicals |
| Athelney Trust plc |
Air Products and Athelney Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Athelney Trust
The main advantage of trading using opposite Air Products and Athelney Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Athelney Trust 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 Athelney Trust will offset losses from the drop in Athelney Trust's long position.| Air Products vs. Rightmove PLC | Air Products vs. Games Workshop Group | Air Products vs. Santhera Pharmaceuticals Holding | Air Products vs. Auto Trader Group |
| Athelney Trust vs. McPhy Energy | Athelney Trust vs. Tungsten West PLC | Athelney Trust vs. Versarien PLC | Athelney Trust vs. Tertiary Minerals Plc |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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