Correlation Between Air Products and Sociedad Química
Can any of the company-specific risk be diversified away by investing in both Air Products and Sociedad Química 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 Sociedad Química 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 Sociedad Qumica y, you can compare the effects of market volatilities on Air Products and Sociedad Química 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 Sociedad Química. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Sociedad Química.
Diversification Opportunities for Air Products and Sociedad Química
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Sociedad is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Sociedad Qumica y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Qumica y 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 Sociedad Química. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Qumica y has no effect on the direction of Air Products i.e., Air Products and Sociedad Química go up and down completely randomly.
Pair Corralation between Air Products and Sociedad Química
Assuming the 90 days horizon Air Products and is expected to generate 0.56 times more return on investment than Sociedad Química. However, Air Products and is 1.8 times less risky than Sociedad Química. It trades about 0.02 of its potential returns per unit of risk. Sociedad Qumica y is currently generating about -0.03 per unit of risk. If you would invest 27,244 in Air Products and on October 20, 2024 and sell it today you would earn a total of 3,136 from holding Air Products and or generate 11.51% 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. Sociedad Qumica y
Performance |
| Timeline |
| Air Products |
| Sociedad Qumica y |
Air Products and Sociedad Química Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Sociedad Química
The main advantage of trading using opposite Air Products and Sociedad Química positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Sociedad Química 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 Sociedad Química will offset losses from the drop in Sociedad Química's long position.| Air Products vs. Air Liquide SA | Air Products vs. AIR LIQUIDE ADR | Air Products vs. Shin Etsu Chemical Co | Air Products vs. BASF SE |
| Sociedad Química vs. Air Liquide SA | Sociedad Química vs. AIR LIQUIDE ADR | Sociedad Química vs. Air Products and | Sociedad Química vs. Shin Etsu Chemical Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |