Correlation Between Air Products and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Air Products and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Air Products and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Ecclesiastical Insurance.
Diversification Opportunities for Air Products and Ecclesiastical Insurance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Ecclesiastical is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Air Products i.e., Air Products and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Air Products and Ecclesiastical Insurance
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 11.63 times more return on investment than Ecclesiastical Insurance. However, Air Products is 11.63 times more volatile than Ecclesiastical Insurance Office. It trades about 0.06 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.06 per unit of risk. If you would invest 26,650 in Air Products Chemicals on September 3, 2024 and sell it today you would earn a total of 6,642 from holding Air Products Chemicals or generate 24.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Air Products Chemicals vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Air Products Chemicals |
| Ecclesiastical Insurance |
Air Products and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Ecclesiastical Insurance
The main advantage of trading using opposite Air Products and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Air Products vs. Morgan Advanced Materials | Air Products vs. Applied Materials | Air Products vs. Compagnie Plastic Omnium | Air Products vs. Spirent Communications plc |
| Ecclesiastical Insurance vs. LBG Media PLC | Ecclesiastical Insurance vs. LPKF Laser Electronics | Ecclesiastical Insurance vs. One Media iP | Ecclesiastical Insurance vs. Grand Vision Media |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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