Correlation Between Air Products and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Air Products and Creo Medical 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 Creo Medical 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 Creo Medical Group, you can compare the effects of market volatilities on Air Products and Creo Medical 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 Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Creo Medical.
Diversification Opportunities for Air Products and Creo Medical
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Creo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group 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 Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Air Products i.e., Air Products and Creo Medical go up and down completely randomly.
Pair Corralation between Air Products and Creo Medical
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.58 times more return on investment than Creo Medical. However, Air Products Chemicals is 1.73 times less risky than Creo Medical. It trades about 0.6 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.11 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 5,335 from holding Air Products Chemicals or generate 18.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Air Products Chemicals vs. Creo Medical Group
Performance |
| Timeline |
| Air Products Chemicals |
| Creo Medical Group |
Air Products and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Creo Medical
The main advantage of trading using opposite Air Products and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical'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 |
| Creo Medical vs. Medical Properties Trust | Creo Medical vs. Porvair plc | Creo Medical vs. National Beverage Corp | Creo Medical vs. Ecofin Global Utilities |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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