Correlation Between Air Products and Canadian General
Can any of the company-specific risk be diversified away by investing in both Air Products and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on Air Products and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Canadian General.
Diversification Opportunities for Air Products and Canadian General
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Canadian is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Air Products i.e., Air Products and Canadian General go up and down completely randomly.
Pair Corralation between Air Products and Canadian General
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.5 times more return on investment than Canadian General. However, Air Products Chemicals is 2.01 times less risky than Canadian General. It trades about 0.63 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.06 per unit of risk. If you would invest 28,245 in Air Products Chemicals on November 7, 2024 and sell it today you would earn a total of 5,768 from holding Air Products Chemicals or generate 20.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Canadian General Investments
Performance |
| Timeline |
| Air Products Chemicals |
| Canadian General Inv |
Air Products and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Canadian General
The main advantage of trading using opposite Air Products and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Air Products vs. Rheinmetall AG | Air Products vs. Golden Metal Resources | Air Products vs. Veolia Environnement VE | Air Products vs. Europa Metals |
| Canadian General vs. Coeur Mining | Canadian General vs. Eastinco Mining Exploration | Canadian General vs. Silver Bullet Data | Canadian General vs. Tyson Foods Cl |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |