Correlation Between Air Products and Natura Co
Can any of the company-specific risk be diversified away by investing in both Air Products and Natura Co 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 Natura Co 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 Natura Co Holding, you can compare the effects of market volatilities on Air Products and Natura Co 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 Natura Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Natura Co.
Diversification Opportunities for Air Products and Natura Co
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Natura is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Natura Co Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura Co Holding 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 Natura Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura Co Holding has no effect on the direction of Air Products i.e., Air Products and Natura Co go up and down completely randomly.
Pair Corralation between Air Products and Natura Co
Assuming the 90 days trading horizon Air Products and is expected to generate 0.19 times more return on investment than Natura Co. However, Air Products and is 5.31 times less risky than Natura Co. It trades about 0.23 of its potential returns per unit of risk. Natura Co Holding is currently generating about 0.03 per unit of risk. If you would invest 44,850 in Air Products and on November 3, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Natura Co Holding
Performance |
| Timeline |
| Air Products |
| Natura Co Holding |
Air Products and Natura Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Natura Co
The main advantage of trading using opposite Air Products and Natura Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Natura Co 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 Natura Co will offset losses from the drop in Natura Co's long position.| Air Products vs. HCA Healthcare, | Air Products vs. UnitedHealth Group Incorporated | Air Products vs. Academy Sports and | Air Products vs. Fair Isaac |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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