Correlation Between AIR PRODCHEMICALS and GOODTECH ASA
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and GOODTECH ASA 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 GOODTECH ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and GOODTECH ASA A, you can compare the effects of market volatilities on AIR PRODCHEMICALS and GOODTECH ASA 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 GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and GOODTECH ASA.
Diversification Opportunities for AIR PRODCHEMICALS and GOODTECH ASA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIR and GOODTECH is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A 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 GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and GOODTECH ASA go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and GOODTECH ASA
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.62 times more return on investment than GOODTECH ASA. However, AIR PRODCHEMICALS is 1.6 times less risky than GOODTECH ASA. It trades about 0.37 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about 0.07 per unit of risk. If you would invest 28,090 in AIR PRODCHEMICALS on October 22, 2024 and sell it today you would earn a total of 2,210 from holding AIR PRODCHEMICALS or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. GOODTECH ASA A
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| GOODTECH ASA A |
AIR PRODCHEMICALS and GOODTECH ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and GOODTECH ASA
The main advantage of trading using opposite AIR PRODCHEMICALS and GOODTECH ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, GOODTECH ASA 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 GOODTECH ASA will offset losses from the drop in GOODTECH ASA's long position.| AIR PRODCHEMICALS vs. Corporate Office Properties | AIR PRODCHEMICALS vs. FIH MOBILE | AIR PRODCHEMICALS vs. HK Electric Investments | AIR PRODCHEMICALS vs. Tower One Wireless |
| GOODTECH ASA vs. FAST RETAIL ADR | GOODTECH ASA vs. H2O Retailing | GOODTECH ASA vs. AIR PRODCHEMICALS | GOODTECH ASA vs. Ultra Clean Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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