Correlation Between Gamma Communications and Air Products
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and Air Products and, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Air Products.
Diversification Opportunities for Gamma Communications and Air Products
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gamma and Air is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Gamma Communications 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 Gamma Communications plc 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 has no effect on the direction of Gamma Communications i.e., Gamma Communications and Air Products go up and down completely randomly.
Pair Corralation between Gamma Communications and Air Products
Assuming the 90 days horizon Gamma Communications is expected to generate 1.18 times less return on investment than Air Products. But when comparing it to its historical volatility, Gamma Communications plc is 1.28 times less risky than Air Products. It trades about 0.06 of its potential returns per unit of risk. Air Products and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 29,350 in Air Products and on September 13, 2024 and sell it today you would earn a total of 510.00 from holding Air Products and or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. Air Products and
Performance |
| Timeline |
| Gamma Communications plc |
| Air Products |
Gamma Communications and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Air Products
The main advantage of trading using opposite Gamma Communications and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. Lamar Advertising | Gamma Communications vs. CARSALESCOM | Gamma Communications vs. Ribbon Communications | Gamma Communications vs. Charter Communications |
| Air Products vs. AGF Management Limited | Air Products vs. Gamma Communications plc | Air Products vs. Computershare Limited | Air Products vs. COMPUTERSHARE |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |