Correlation Between Air Products and TR Property
Can any of the company-specific risk be diversified away by investing in both Air Products and TR Property 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 TR Property 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 TR Property Investment, you can compare the effects of market volatilities on Air Products and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and TR Property.
Diversification Opportunities for Air Products and TR Property
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and TRY is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Air Products i.e., Air Products and TR Property go up and down completely randomly.
Pair Corralation between Air Products and TR Property
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 1.23 times more return on investment than TR Property. However, Air Products is 1.23 times more volatile than TR Property Investment. It trades about -0.05 of its potential returns per unit of risk. TR Property Investment is currently generating about -0.26 per unit of risk. If you would invest 30,624 in Air Products Chemicals on October 16, 2024 and sell it today you would lose (501.00) from holding Air Products Chemicals or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Air Products Chemicals vs. TR Property Investment
Performance |
| Timeline |
| Air Products Chemicals |
| TR Property Investment |
Air Products and TR Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and TR Property
The main advantage of trading using opposite Air Products and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property's long position.| Air Products vs. Morgan Advanced Materials | Air Products vs. Discover Financial Services | Air Products vs. Sparebank 1 SR | Air Products vs. Martin Marietta Materials |
| TR Property vs. Moneta Money Bank | TR Property vs. Sydbank | TR Property vs. Air Products Chemicals | TR Property vs. Zurich Insurance 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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