Correlation Between FMC Corp and Air Products
Can any of the company-specific risk be diversified away by investing in both FMC Corp and Air Products 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 FMC Corp and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FMC Corp and Air Products Chemicals, you can compare the effects of market volatilities on FMC Corp and Air Products 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 FMC Corp with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC Corp and Air Products.
Diversification Opportunities for FMC Corp and Air Products
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FMC and Air is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and FMC Corp 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 FMC Corp are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of FMC Corp i.e., FMC Corp and Air Products go up and down completely randomly.
Pair Corralation between FMC Corp and Air Products
Assuming the 90 days trading horizon FMC Corp is expected to under-perform the Air Products. In addition to that, FMC Corp is 1.89 times more volatile than Air Products Chemicals. It trades about -0.1 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.32 per unit of volatility. If you would invest 30,594 in Air Products Chemicals on September 5, 2024 and sell it today you would earn a total of 2,465 from holding Air Products Chemicals or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FMC Corp vs. Air Products Chemicals
Performance |
| Timeline |
| FMC Corp |
| Air Products Chemicals |
FMC Corp and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FMC Corp and Air Products
The main advantage of trading using opposite FMC Corp and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMC Corp position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| FMC Corp vs. Air Products Chemicals | FMC Corp vs. Neometals | FMC Corp vs. GreenX Metals | FMC Corp vs. Endeavour Mining Corp |
| Air Products vs. Samsung Electronics Co | Air Products vs. Samsung Electronics Co | Air Products vs. Hyundai Motor | Air Products vs. Toyota Motor Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings 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 | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |