Correlation Between Air Products and Natural Health
Can any of the company-specific risk be diversified away by investing in both Air Products and Natural Health 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 Natural Health 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 Natural Health Trends, you can compare the effects of market volatilities on Air Products and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Natural Health.
Diversification Opportunities for Air Products and Natural Health
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Natural is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Air Products i.e., Air Products and Natural Health go up and down completely randomly.
Pair Corralation between Air Products and Natural Health
Assuming the 90 days horizon Air Products and is expected to generate 0.63 times more return on investment than Natural Health. However, Air Products and is 1.58 times less risky than Natural Health. It trades about 0.17 of its potential returns per unit of risk. Natural Health Trends is currently generating about 0.05 per unit of risk. If you would invest 29,550 in Air Products and on August 28, 2024 and sell it today you would earn a total of 2,120 from holding Air Products and or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Natural Health Trends
Performance |
| Timeline |
| Air Products |
| Natural Health Trends |
Air Products and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Natural Health
The main advantage of trading using opposite Air Products and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| Air Products vs. Natural Health Trends | Air Products vs. Bausch Health Companies | Air Products vs. Harmony Gold Mining | Air Products vs. GRUPO CARSO A1 |
| Natural Health vs. Fast Retailing Co | Natural Health vs. Burlington Stores | Natural Health vs. Ross Stores | Natural Health vs. RETAIL FOOD GROUP |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets |