Correlation Between AIR PRODCHEMICALS and Boeing
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and The Boeing, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Boeing.
Diversification Opportunities for AIR PRODCHEMICALS and Boeing
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIR and Boeing is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Boeing go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Boeing
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.83 times more return on investment than Boeing. However, AIR PRODCHEMICALS is 1.21 times less risky than Boeing. It trades about 0.07 of its potential returns per unit of risk. The Boeing is currently generating about -0.06 per unit of risk. If you would invest 23,615 in AIR PRODCHEMICALS on September 2, 2024 and sell it today you would earn a total of 8,015 from holding AIR PRODCHEMICALS or generate 33.94% 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. The Boeing
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Boeing |
AIR PRODCHEMICALS and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Boeing
The main advantage of trading using opposite AIR PRODCHEMICALS and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| AIR PRODCHEMICALS vs. SIVERS SEMICONDUCTORS AB | AIR PRODCHEMICALS vs. Darden Restaurants | AIR PRODCHEMICALS vs. Reliance Steel Aluminum | AIR PRODCHEMICALS vs. Q2M Managementberatung AG |
| Boeing vs. CNVISION MEDIA | Boeing vs. PLAYTIKA HOLDING DL 01 | Boeing vs. Beijing Media | Boeing vs. National Health Investors |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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