Correlation Between Air Products and Scancell Hldgs
Can any of the company-specific risk be diversified away by investing in both Air Products and Scancell Hldgs 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 Scancell Hldgs 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 Scancell Hldgs Plc, you can compare the effects of market volatilities on Air Products and Scancell Hldgs 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 Scancell Hldgs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Scancell Hldgs.
Diversification Opportunities for Air Products and Scancell Hldgs
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Scancell is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Scancell Hldgs Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scancell Hldgs 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 Scancell Hldgs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scancell Hldgs Plc has no effect on the direction of Air Products i.e., Air Products and Scancell Hldgs go up and down completely randomly.
Pair Corralation between Air Products and Scancell Hldgs
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 0.18 times more return on investment than Scancell Hldgs. However, Air Products Chemicals is 5.5 times less risky than Scancell Hldgs. It trades about -0.47 of its potential returns per unit of risk. Scancell Hldgs Plc is currently generating about -0.36 per unit of risk. If you would invest 32,673 in Air Products Chemicals on September 19, 2024 and sell it today you would lose (2,521) from holding Air Products Chemicals or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. Scancell Hldgs Plc
Performance |
| Timeline |
| Air Products Chemicals |
| Scancell Hldgs Plc |
Air Products and Scancell Hldgs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Scancell Hldgs
The main advantage of trading using opposite Air Products and Scancell Hldgs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Scancell Hldgs 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 Scancell Hldgs will offset losses from the drop in Scancell Hldgs' long position.| Air Products vs. Zurich Insurance Group | Air Products vs. Ironveld Plc | Air Products vs. Impax Environmental Markets | Air Products vs. Tata Steel Limited |
| Scancell Hldgs vs. Qurate Retail Series | Scancell Hldgs vs. Eastman Chemical Co | Scancell Hldgs vs. Air Products Chemicals | Scancell Hldgs vs. Scandic Hotels Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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