Correlation Between AIR PRODCHEMICALS and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on AIR PRODCHEMICALS and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and MEDICAL FACILITIES.
Diversification Opportunities for AIR PRODCHEMICALS and MEDICAL FACILITIES
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AIR and MEDICAL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and MEDICAL FACILITIES
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.49 times more return on investment than MEDICAL FACILITIES. However, AIR PRODCHEMICALS is 2.02 times less risky than MEDICAL FACILITIES. It trades about 0.31 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about -0.01 per unit of risk. If you would invest 28,308 in AIR PRODCHEMICALS on October 20, 2024 and sell it today you would earn a total of 1,992 from holding AIR PRODCHEMICALS or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| MEDICAL FACILITIES NEW |
AIR PRODCHEMICALS and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and MEDICAL FACILITIES
The main advantage of trading using opposite AIR PRODCHEMICALS and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| AIR PRODCHEMICALS vs. GEAR4MUSIC LS 10 | AIR PRODCHEMICALS vs. Cleanaway Waste Management | AIR PRODCHEMICALS vs. REVO INSURANCE SPA | AIR PRODCHEMICALS vs. United Insurance Holdings |
| MEDICAL FACILITIES vs. AIR PRODCHEMICALS | MEDICAL FACILITIES vs. KIMBALL ELECTRONICS | MEDICAL FACILITIES vs. STMICROELECTRONICS | MEDICAL FACILITIES vs. Globex Mining Enterprises |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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