Correlation Between AIR PRODCHEMICALS and Fresenius
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Fresenius 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 Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Fresenius SE Co, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Fresenius 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 Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Fresenius.
Diversification Opportunities for AIR PRODCHEMICALS and Fresenius
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and Fresenius is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Fresenius go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Fresenius
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 2.55 times less return on investment than Fresenius. In addition to that, AIR PRODCHEMICALS is 1.07 times more volatile than Fresenius SE Co. It trades about 0.02 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.05 per unit of volatility. If you would invest 2,502 in Fresenius SE Co on September 12, 2024 and sell it today you would earn a total of 887.00 from holding Fresenius SE Co or generate 35.45% 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. Fresenius SE Co
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Fresenius SE |
AIR PRODCHEMICALS and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Fresenius
The main advantage of trading using opposite AIR PRODCHEMICALS and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Fresenius 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 Fresenius will offset losses from the drop in Fresenius' long position.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| Fresenius vs. AIR PRODCHEMICALS | Fresenius vs. SIDETRADE EO 1 | Fresenius vs. Fast Retailing Co | Fresenius vs. SHIN ETSU CHEMICAL |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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