Correlation Between AirBoss Of and Arkema SA
Can any of the company-specific risk be diversified away by investing in both AirBoss Of and Arkema SA 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 AirBoss Of and Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AirBoss of America and Arkema SA ADR, you can compare the effects of market volatilities on AirBoss Of and Arkema SA 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 AirBoss Of with a short position of Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirBoss Of and Arkema SA.
Diversification Opportunities for AirBoss Of and Arkema SA
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AirBoss and Arkema is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AirBoss of America and Arkema SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA ADR and AirBoss Of 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 AirBoss of America are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA ADR has no effect on the direction of AirBoss Of i.e., AirBoss Of and Arkema SA go up and down completely randomly.
Pair Corralation between AirBoss Of and Arkema SA
Assuming the 90 days horizon AirBoss of America is expected to generate 1.81 times more return on investment than Arkema SA. However, AirBoss Of is 1.81 times more volatile than Arkema SA ADR. It trades about 0.06 of its potential returns per unit of risk. Arkema SA ADR is currently generating about 0.02 per unit of risk. If you would invest 273.00 in AirBoss of America on November 2, 2024 and sell it today you would earn a total of 16.00 from holding AirBoss of America or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirBoss of America vs. Arkema SA ADR
Performance |
| Timeline |
| AirBoss of America |
| Arkema SA ADR |
AirBoss Of and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirBoss Of and Arkema SA
The main advantage of trading using opposite AirBoss Of and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirBoss Of position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| AirBoss Of vs. Akzo Nobel NV | AirBoss Of vs. Avoca LLC | AirBoss Of vs. AGC Inc ADR | AirBoss Of vs. Arkema SA ADR |
| Arkema SA vs. Akzo Nobel NV | Arkema SA vs. Avoca LLC | Arkema SA vs. AGC Inc ADR | Arkema SA vs. AirBoss of America |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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