Correlation Between Datagroup and Air Products
Can any of the company-specific risk be diversified away by investing in both Datagroup 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 Datagroup and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datagroup SE and Air Products Chemicals, you can compare the effects of market volatilities on Datagroup 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 Datagroup with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datagroup and Air Products.
Diversification Opportunities for Datagroup and Air Products
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datagroup and Air is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE 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 Datagroup 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 Datagroup SE 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 Datagroup i.e., Datagroup and Air Products go up and down completely randomly.
Pair Corralation between Datagroup and Air Products
Assuming the 90 days trading horizon Datagroup SE is expected to generate 2.54 times more return on investment than Air Products. However, Datagroup is 2.54 times more volatile than Air Products Chemicals. It trades about 0.33 of its potential returns per unit of risk. Air Products Chemicals is currently generating about -0.01 per unit of risk. If you would invest 3,755 in Datagroup SE on September 14, 2024 and sell it today you would earn a total of 845.00 from holding Datagroup SE or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datagroup SE vs. Air Products Chemicals
Performance |
| Timeline |
| Datagroup SE |
| Air Products Chemicals |
Datagroup and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datagroup and Air Products
The main advantage of trading using opposite Datagroup and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datagroup 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.| Datagroup vs. Monster Beverage Corp | Datagroup vs. Allianz Technology Trust | Datagroup vs. Flow Traders NV | Datagroup vs. Albion Technology General |
| Air Products vs. Made Tech Group | Air Products vs. Datalogic | Air Products vs. Allianz Technology Trust | Air Products vs. Extra Space Storage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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