Correlation Between Air Products and Primary Health
Can any of the company-specific risk be diversified away by investing in both Air Products and Primary Health 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 Primary Health 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 Primary Health Properties, you can compare the effects of market volatilities on Air Products and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Primary Health.
Diversification Opportunities for Air Products and Primary Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Primary is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Air Products i.e., Air Products and Primary Health go up and down completely randomly.
Pair Corralation between Air Products and Primary Health
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 1.06 times more return on investment than Primary Health. However, Air Products is 1.06 times more volatile than Primary Health Properties. It trades about 0.53 of its potential returns per unit of risk. Primary Health Properties is currently generating about 0.12 per unit of risk. If you would invest 28,390 in Air Products Chemicals on November 3, 2024 and sell it today you would earn a total of 5,190 from holding Air Products Chemicals or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Primary Health Properties
Performance |
| Timeline |
| Air Products Chemicals |
| Primary Health Properties |
Air Products and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Primary Health
The main advantage of trading using opposite Air Products and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.| Air Products vs. National Beverage Corp | Air Products vs. Associated British Foods | Air Products vs. CAP LEASE AVIATION | Air Products vs. Geely Automobile Holdings |
| Primary Health vs. Jacquet Metal Service | Primary Health vs. GreenX Metals | Primary Health vs. Martin Marietta Materials | Primary Health vs. GoldMining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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