Correlation Between AIR PRODCHEMICALS and Tradegate
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Tradegate.
Diversification Opportunities for AIR PRODCHEMICALS and Tradegate
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIR and Tradegate is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Tradegate go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Tradegate
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 2.67 times more return on investment than Tradegate. However, AIR PRODCHEMICALS is 2.67 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.07 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.19 per unit of risk. If you would invest 29,320 in AIR PRODCHEMICALS on September 14, 2024 and sell it today you would earn a total of 430.00 from holding AIR PRODCHEMICALS or generate 1.47% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Tradegate AG Wertpap |
AIR PRODCHEMICALS and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Tradegate
The main advantage of trading using opposite AIR PRODCHEMICALS and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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