Correlation Between AIR PRODCHEMICALS and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and ALEFARM BREWING 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 ALEFARM BREWING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and ALEFARM BREWING DK 05, you can compare the effects of market volatilities on AIR PRODCHEMICALS and ALEFARM BREWING 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 ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and ALEFARM BREWING.
Diversification Opportunities for AIR PRODCHEMICALS and ALEFARM BREWING
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIR and ALEFARM is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK 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 ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and ALEFARM BREWING
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.25 times more return on investment than ALEFARM BREWING. However, AIR PRODCHEMICALS is 3.94 times less risky than ALEFARM BREWING. It trades about 0.03 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about -0.05 per unit of risk. If you would invest 30,156 in AIR PRODCHEMICALS on October 24, 2024 and sell it today you would earn a total of 544.00 from holding AIR PRODCHEMICALS or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| ALEFARM BREWING DK |
AIR PRODCHEMICALS and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and ALEFARM BREWING
The main advantage of trading using opposite AIR PRODCHEMICALS and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| ALEFARM BREWING vs. AIR PRODCHEMICALS | ALEFARM BREWING vs. Arrow Electronics | ALEFARM BREWING vs. LPKF Laser Electronics | ALEFARM BREWING vs. Commercial Vehicle Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |