Correlation Between Air Products and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Air Products and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on Air Products and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Beeks Trading.
Diversification Opportunities for Air Products and Beeks Trading
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Beeks is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Air Products i.e., Air Products and Beeks Trading go up and down completely randomly.
Pair Corralation between Air Products and Beeks Trading
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.66 times more return on investment than Beeks Trading. However, Air Products Chemicals is 1.51 times less risky than Beeks Trading. It trades about 0.22 of its potential returns per unit of risk. Beeks Trading is currently generating about -0.1 per unit of risk. If you would invest 29,423 in Air Products Chemicals on October 25, 2024 and sell it today you would earn a total of 2,090 from holding Air Products Chemicals or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Beeks Trading
Performance |
| Timeline |
| Air Products Chemicals |
| Beeks Trading |
Air Products and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Beeks Trading
The main advantage of trading using opposite Air Products and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Air Products vs. Flutter Entertainment PLC | Air Products vs. Ubisoft Entertainment | Air Products vs. Grand Vision Media | Air Products vs. GlobalData PLC |
| Beeks Trading vs. BYD Co | Beeks Trading vs. Volkswagen AG | Beeks Trading vs. Volkswagen AG Non Vtg | Beeks Trading vs. Deutsche Post AG |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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