Correlation Between AIR PRODCHEMICALS and Paragon Banking
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Paragon Banking 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 Paragon Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Paragon Banking Group, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Paragon Banking 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 Paragon Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Paragon Banking.
Diversification Opportunities for AIR PRODCHEMICALS and Paragon Banking
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AIR and Paragon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Paragon Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Banking Group 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 Paragon Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Banking Group has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Paragon Banking go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Paragon Banking
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.37 times more return on investment than Paragon Banking. However, AIR PRODCHEMICALS is 2.7 times less risky than Paragon Banking. It trades about -0.52 of its potential returns per unit of risk. Paragon Banking Group is currently generating about -0.32 per unit of risk. If you would invest 29,560 in AIR PRODCHEMICALS on October 14, 2024 and sell it today you would lose (1,910) from holding AIR PRODCHEMICALS or give up 6.46% 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. Paragon Banking Group
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Paragon Banking Group |
AIR PRODCHEMICALS and Paragon Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Paragon Banking
The main advantage of trading using opposite AIR PRODCHEMICALS and Paragon Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Paragon Banking 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 Paragon Banking will offset losses from the drop in Paragon Banking's long position.| AIR PRODCHEMICALS vs. Coffee Holding Co | AIR PRODCHEMICALS vs. Scandinavian Tobacco Group | AIR PRODCHEMICALS vs. BRIT AMER TOBACCO | AIR PRODCHEMICALS vs. KOBE STEEL LTD |
| Paragon Banking vs. betterU Education Corp | Paragon Banking vs. Adtalem Global Education | Paragon Banking vs. AIR PRODCHEMICALS | Paragon Banking vs. Siamgas And Petrochemicals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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