Correlation Between Air Products and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Air Products and SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Air Products and SupplyMe Capital 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and SupplyMe Capital.
Diversification Opportunities for Air Products and SupplyMe Capital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and SupplyMe is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Air Products i.e., Air Products and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Air Products and SupplyMe Capital
Assuming the 90 days trading horizon Air Products Chemicals is expected to under-perform the SupplyMe Capital. But the stock apears to be less risky and, when comparing its historical volatility, Air Products Chemicals is 27.96 times less risky than SupplyMe Capital. The stock trades about -0.79 of its potential returns per unit of risk. The SupplyMe Capital PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.30 in SupplyMe Capital PLC on September 23, 2024 and sell it today you would earn a total of 0.08 from holding SupplyMe Capital PLC or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products Chemicals vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Air Products Chemicals |
| SupplyMe Capital PLC |
Air Products and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and SupplyMe Capital
The main advantage of trading using opposite Air Products and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Air Products vs. CNH Industrial NV | Air Products vs. DFS Furniture PLC | Air Products vs. alstria office REIT AG | Air Products vs. bet at home AG |
| SupplyMe Capital vs. XLMedia PLC | SupplyMe Capital vs. Air Products Chemicals | SupplyMe Capital vs. Wizz Air Holdings | SupplyMe Capital vs. AcadeMedia AB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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