Correlation Between AIR PRODCHEMICALS and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Gelsenwasser 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 Gelsenwasser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Gelsenwasser AG, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Gelsenwasser.
Diversification Opportunities for AIR PRODCHEMICALS and Gelsenwasser
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AIR and Gelsenwasser is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Gelsenwasser go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Gelsenwasser
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the Gelsenwasser. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 2.78 times less risky than Gelsenwasser. The stock trades about -0.53 of its potential returns per unit of risk. The Gelsenwasser AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 49,800 in Gelsenwasser AG on October 15, 2024 and sell it today you would earn a total of 700.00 from holding Gelsenwasser AG or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Gelsenwasser AG
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Gelsenwasser AG |
AIR PRODCHEMICALS and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Gelsenwasser
The main advantage of trading using opposite AIR PRODCHEMICALS and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| AIR PRODCHEMICALS vs. CN MODERN DAIRY | AIR PRODCHEMICALS vs. United Natural Foods | AIR PRODCHEMICALS vs. Air Lease | AIR PRODCHEMICALS vs. Ebro Foods SA |
| Gelsenwasser vs. Playmates Toys Limited | Gelsenwasser vs. Advanced Medical Solutions | Gelsenwasser vs. Urban Outfitters | Gelsenwasser vs. AIR PRODCHEMICALS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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