Correlation Between Air Products and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Air Products and Bread Financial 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 Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Bread Financial Holdings, you can compare the effects of market volatilities on Air Products and Bread Financial 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 Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Bread Financial.
Diversification Opportunities for Air Products and Bread Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Bread is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 and are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Air Products i.e., Air Products and Bread Financial go up and down completely randomly.
Pair Corralation between Air Products and Bread Financial
Assuming the 90 days trading horizon Air Products and is expected to generate 0.16 times more return on investment than Bread Financial. However, Air Products and is 6.28 times less risky than Bread Financial. It trades about 0.24 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about -0.03 per unit of risk. If you would invest 44,850 in Air Products and on November 5, 2024 and sell it today you would earn a total of 1,050 from holding Air Products and or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Air Products and vs. Bread Financial Holdings
Performance |
| Timeline |
| Air Products |
| Bread Financial Holdings |
Air Products and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Bread Financial
The main advantage of trading using opposite Air Products and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Air Products vs. Medical Properties Trust, | Air Products vs. Fresenius Medical Care | Air Products vs. Global X Funds | Air Products vs. Public Storage |
| Bread Financial vs. Visa Inc | Bread Financial vs. Mastercard Incorporated | Bread Financial vs. American Express | Bread Financial vs. PayPal Holdings |
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 Positions Ratings module to 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.
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