Correlation Between Air Products and Rockfire Resources
Can any of the company-specific risk be diversified away by investing in both Air Products and Rockfire Resources 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 Rockfire Resources 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 Rockfire Resources plc, you can compare the effects of market volatilities on Air Products and Rockfire Resources 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 Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Rockfire Resources.
Diversification Opportunities for Air Products and Rockfire Resources
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Rockfire is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources plc 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 Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of Air Products i.e., Air Products and Rockfire Resources go up and down completely randomly.
Pair Corralation between Air Products and Rockfire Resources
If you would invest 31,569 in Air Products Chemicals on August 30, 2024 and sell it today you would earn a total of 1,770 from holding Air Products Chemicals or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Products Chemicals vs. Rockfire Resources plc
Performance |
| Timeline |
| Air Products Chemicals |
| Rockfire Resources plc |
Air Products and Rockfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Rockfire Resources
The main advantage of trading using opposite Air Products and Rockfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Rockfire Resources 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 Rockfire Resources will offset losses from the drop in Rockfire Resources' long position.| Air Products vs. Tungsten West PLC | Air Products vs. Argo Group Limited | Air Products vs. Hardide PLC | Air Products vs. Versarien PLC |
| Rockfire Resources vs. AMG Advanced Metallurgical | Rockfire Resources vs. Zoom Video Communications | Rockfire Resources vs. Neometals | Rockfire Resources vs. Air Products Chemicals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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