Correlation Between AIR PRODCHEMICALS and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and SYSTEMAIR 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 SYSTEMAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and SYSTEMAIR AB, you can compare the effects of market volatilities on AIR PRODCHEMICALS and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and SYSTEMAIR.
Diversification Opportunities for AIR PRODCHEMICALS and SYSTEMAIR
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AIR and SYSTEMAIR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and SYSTEMAIR go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and SYSTEMAIR
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 6.79 times less return on investment than SYSTEMAIR. But when comparing it to its historical volatility, AIR PRODCHEMICALS is 1.87 times less risky than SYSTEMAIR. It trades about 0.01 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 426.00 in SYSTEMAIR AB on October 11, 2024 and sell it today you would earn a total of 346.00 from holding SYSTEMAIR AB or generate 81.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. SYSTEMAIR AB
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| SYSTEMAIR AB |
AIR PRODCHEMICALS and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and SYSTEMAIR
The main advantage of trading using opposite AIR PRODCHEMICALS and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR'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 |
| SYSTEMAIR vs. Air Transport Services | SYSTEMAIR vs. GOLD ROAD RES | SYSTEMAIR vs. KINGBOARD CHEMICAL | SYSTEMAIR 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |