Correlation Between AIR PRODCHEMICALS and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and REVO INSURANCE 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 REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and REVO INSURANCE SPA, you can compare the effects of market volatilities on AIR PRODCHEMICALS and REVO INSURANCE 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and REVO INSURANCE.
Diversification Opportunities for AIR PRODCHEMICALS and REVO INSURANCE
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and REVO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and REVO INSURANCE go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and REVO INSURANCE
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the REVO INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 3.29 times less risky than REVO INSURANCE. The stock trades about -0.19 of its potential returns per unit of risk. The REVO INSURANCE SPA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,140 in REVO INSURANCE SPA on December 10, 2024 and sell it today you would earn a total of 70.00 from holding REVO INSURANCE SPA or generate 6.14% 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. REVO INSURANCE SPA
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| REVO INSURANCE SPA |
AIR PRODCHEMICALS and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and REVO INSURANCE
The main advantage of trading using opposite AIR PRODCHEMICALS and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| AIR PRODCHEMICALS vs. AGNC INVESTMENT | AIR PRODCHEMICALS vs. H2O Retailing | AIR PRODCHEMICALS vs. SPARTAN STORES | AIR PRODCHEMICALS vs. MARKET VECTR RETAIL |
| REVO INSURANCE vs. The Travelers Companies | REVO INSURANCE vs. G5 Entertainment AB | REVO INSURANCE vs. Nomad Foods | REVO INSURANCE vs. CORA GOLD LTD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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