Correlation Between AIR PRODCHEMICALS and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and FUYO GENERAL 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 FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and FUYO GENERAL LEASE, you can compare the effects of market volatilities on AIR PRODCHEMICALS and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and FUYO GENERAL.
Diversification Opportunities for AIR PRODCHEMICALS and FUYO GENERAL
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and FUYO is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and FUYO GENERAL go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and FUYO GENERAL
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.77 times more return on investment than FUYO GENERAL. However, AIR PRODCHEMICALS is 1.3 times less risky than FUYO GENERAL. It trades about 0.39 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.22 per unit of risk. If you would invest 28,830 in AIR PRODCHEMICALS on August 31, 2024 and sell it today you would earn a total of 2,800 from holding AIR PRODCHEMICALS or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| FUYO GENERAL LEASE |
AIR PRODCHEMICALS and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and FUYO GENERAL
The main advantage of trading using opposite AIR PRODCHEMICALS and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL'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 |
| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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