Correlation Between AIR PRODCHEMICALS and NOW
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and NOW 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 PRODCHEMICALS and NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and NOW Inc, you can compare the effects of market volatilities on AIR PRODCHEMICALS and NOW 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 PRODCHEMICALS with a short position of NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and NOW.
Diversification Opportunities for AIR PRODCHEMICALS and NOW
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIR and NOW is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc and AIR PRODCHEMICALS 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 PRODCHEMICALS are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and NOW go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and NOW
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.82 times more return on investment than NOW. However, AIR PRODCHEMICALS is 1.22 times less risky than NOW. It trades about 0.09 of its potential returns per unit of risk. NOW Inc is currently generating about 0.06 per unit of risk. If you would invest 29,470 in AIR PRODCHEMICALS on September 13, 2024 and sell it today you would earn a total of 560.00 from holding AIR PRODCHEMICALS or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. NOW Inc
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| NOW Inc |
AIR PRODCHEMICALS and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and NOW
The main advantage of trading using opposite AIR PRODCHEMICALS and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| AIR PRODCHEMICALS vs. DICKS Sporting Goods | AIR PRODCHEMICALS vs. Vishay Intertechnology | AIR PRODCHEMICALS vs. Transportadora de Gas | AIR PRODCHEMICALS vs. SCIENCE IN SPORT |
| NOW vs. Alfa Financial Software | NOW vs. Regions Financial | NOW vs. FORMPIPE SOFTWARE AB | NOW vs. Aozora Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |