Correlation Between AIR PRODCHEMICALS and PowerHouse Energy
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and PowerHouse Energy 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 PowerHouse Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and PowerHouse Energy Group, you can compare the effects of market volatilities on AIR PRODCHEMICALS and PowerHouse Energy 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 PowerHouse Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and PowerHouse Energy.
Diversification Opportunities for AIR PRODCHEMICALS and PowerHouse Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AIR and PowerHouse is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and PowerHouse Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerHouse Energy 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 PowerHouse Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerHouse Energy has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and PowerHouse Energy go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and PowerHouse Energy
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.32 times more return on investment than PowerHouse Energy. However, AIR PRODCHEMICALS is 3.1 times less risky than PowerHouse Energy. It trades about -0.1 of its potential returns per unit of risk. PowerHouse Energy Group is currently generating about -0.04 per unit of risk. If you would invest 31,230 in AIR PRODCHEMICALS on November 28, 2024 and sell it today you would lose (1,200) from holding AIR PRODCHEMICALS or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. PowerHouse Energy Group
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| PowerHouse Energy |
AIR PRODCHEMICALS and PowerHouse Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and PowerHouse Energy
The main advantage of trading using opposite AIR PRODCHEMICALS and PowerHouse Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, PowerHouse Energy 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 PowerHouse Energy will offset losses from the drop in PowerHouse Energy's long position.| AIR PRODCHEMICALS vs. Retail Estates NV | AIR PRODCHEMICALS vs. FAST RETAIL ADR | AIR PRODCHEMICALS vs. United Overseas Insurance | AIR PRODCHEMICALS vs. CREDIT AGRICOLE |
| PowerHouse Energy vs. Yuexiu Transport Infrastructure | PowerHouse Energy vs. Salesforce | PowerHouse Energy vs. Fast Retailing Co | PowerHouse Energy vs. National Retail Properties |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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