Correlation Between AIR PRODCHEMICALS and AbbVie
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and AbbVie 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 AbbVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and AbbVie Inc, you can compare the effects of market volatilities on AIR PRODCHEMICALS and AbbVie 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 AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and AbbVie.
Diversification Opportunities for AIR PRODCHEMICALS and AbbVie
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and AbbVie is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie 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 AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and AbbVie go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and AbbVie
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.71 times more return on investment than AbbVie. However, AIR PRODCHEMICALS is 1.41 times less risky than AbbVie. It trades about 0.13 of its potential returns per unit of risk. AbbVie Inc is currently generating about 0.07 per unit of risk. If you would invest 29,180 in AIR PRODCHEMICALS on September 12, 2024 and sell it today you would earn a total of 900.00 from holding AIR PRODCHEMICALS or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. AbbVie Inc
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| AbbVie Inc |
AIR PRODCHEMICALS and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and AbbVie
The main advantage of trading using opposite AIR PRODCHEMICALS and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| AbbVie vs. Mitsubishi Gas Chemical | AbbVie vs. Soken Chemical Engineering | AbbVie vs. CITY OFFICE REIT | AbbVie vs. AIR PRODCHEMICALS |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |