Correlation Between AIR PRODCHEMICALS and EDP -
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and EDP - 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 EDP - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and EDP Energias, you can compare the effects of market volatilities on AIR PRODCHEMICALS and EDP - 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 EDP -. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and EDP -.
Diversification Opportunities for AIR PRODCHEMICALS and EDP -
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIR and EDP is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias 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 EDP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and EDP - go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and EDP -
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 1.1 times more return on investment than EDP -. However, AIR PRODCHEMICALS is 1.1 times more volatile than EDP Energias. It trades about 0.05 of its potential returns per unit of risk. EDP Energias is currently generating about -0.04 per unit of risk. If you would invest 24,909 in AIR PRODCHEMICALS on September 4, 2024 and sell it today you would earn a total of 6,721 from holding AIR PRODCHEMICALS or generate 26.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. EDP Energias
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| EDP Energias |
AIR PRODCHEMICALS and EDP - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and EDP -
The main advantage of trading using opposite AIR PRODCHEMICALS and EDP - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, EDP - 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 EDP - will offset losses from the drop in EDP -'s long position.| AIR PRODCHEMICALS vs. TOTAL GABON | AIR PRODCHEMICALS vs. Walgreens Boots Alliance | AIR PRODCHEMICALS vs. Peak Resources Limited |
| EDP - vs. Harmony Gold Mining | EDP - vs. AIR PRODCHEMICALS | EDP - vs. Diamondrock Hospitality Co | EDP - vs. Jacquet Metal Service |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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