Correlation Between Apple and Air Products
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Air Products and, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Air Products.
Diversification Opportunities for Apple and Air Products
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and Air is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Apple 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 Apple Inc 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 Apple i.e., Apple and Air Products go up and down completely randomly.
Pair Corralation between Apple and Air Products
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.92 times more return on investment than Air Products. However, Apple Inc is 1.09 times less risky than Air Products. It trades about 0.14 of its potential returns per unit of risk. Air Products and is currently generating about 0.12 per unit of risk. If you would invest 4,295 in Apple Inc on October 25, 2024 and sell it today you would earn a total of 2,377 from holding Apple Inc or generate 55.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.51% |
| Values | Daily Returns |
Apple Inc vs. Air Products and
Performance |
| Timeline |
| Apple Inc |
| Air Products |
Apple and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Air Products
The main advantage of trading using opposite Apple and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Vulcan Materials | Apple vs. SVB Financial Group | Apple vs. Synchrony Financial | Apple vs. Brpr Corporate Offices |
| Air Products vs. Align Technology | Air Products vs. JB Hunt Transport | Air Products vs. MAHLE Metal Leve | Air Products vs. Bio Techne |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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