Correlation Between AIR PRODCHEMICALS and MOBILE FACTORY
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and MOBILE FACTORY 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 MOBILE FACTORY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and MOBILE FACTORY INC, you can compare the effects of market volatilities on AIR PRODCHEMICALS and MOBILE FACTORY 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 MOBILE FACTORY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and MOBILE FACTORY.
Diversification Opportunities for AIR PRODCHEMICALS and MOBILE FACTORY
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AIR and MOBILE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY 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 MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and MOBILE FACTORY go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and MOBILE FACTORY
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the MOBILE FACTORY. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 1.71 times less risky than MOBILE FACTORY. The stock trades about -0.66 of its potential returns per unit of risk. The MOBILE FACTORY INC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 580.00 in MOBILE FACTORY INC on October 10, 2024 and sell it today you would lose (10.00) from holding MOBILE FACTORY INC or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. MOBILE FACTORY INC
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| MOBILE FACTORY INC |
AIR PRODCHEMICALS and MOBILE FACTORY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and MOBILE FACTORY
The main advantage of trading using opposite AIR PRODCHEMICALS and MOBILE FACTORY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, MOBILE FACTORY 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 MOBILE FACTORY will offset losses from the drop in MOBILE FACTORY's long position.| AIR PRODCHEMICALS vs. Magnachip Semiconductor | AIR PRODCHEMICALS vs. FIREWEED METALS P | AIR PRODCHEMICALS vs. Hua Hong Semiconductor | AIR PRODCHEMICALS vs. Perseus Mining Limited |
| MOBILE FACTORY vs. Sea Limited | MOBILE FACTORY vs. Electronic Arts | MOBILE FACTORY vs. NEXON Co | MOBILE FACTORY vs. NEXON 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 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..
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