Correlation Between Adriatic Metals and Air Products
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals and Air Products Chemicals, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Air Products.
Diversification Opportunities for Adriatic Metals and Air Products
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adriatic and Air is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and Adriatic Metals 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 Adriatic Metals 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 Chemicals has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Air Products go up and down completely randomly.
Pair Corralation between Adriatic Metals and Air Products
Assuming the 90 days trading horizon Adriatic Metals is expected to generate 3.32 times less return on investment than Air Products. But when comparing it to its historical volatility, Adriatic Metals is 2.05 times less risky than Air Products. It trades about 0.02 of its potential returns per unit of risk. Air Products Chemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 26,663 in Air Products Chemicals on November 29, 2024 and sell it today you would earn a total of 4,830 from holding Air Products Chemicals or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Adriatic Metals vs. Air Products Chemicals
Performance |
| Timeline |
| Adriatic Metals |
| Air Products Chemicals |
Adriatic Metals and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Air Products
The main advantage of trading using opposite Adriatic Metals and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.| Adriatic Metals vs. Deutsche Pfandbriefbank AG | Adriatic Metals vs. FinecoBank SpA | Adriatic Metals vs. Liechtensteinische Landesbank AG | Adriatic Metals vs. Erste Group Bank |
| Air Products vs. Arrow Electronics | Air Products vs. Compal Electronics GDR | Air Products vs. Naked Wines plc | Air Products vs. PureTech Health plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Positions Ratings 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 | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |