Correlation Between Air Products and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both Air Products and Aeries Technology 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 Products and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Aeries Technology, you can compare the effects of market volatilities on Air Products and Aeries Technology 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 Products with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Aeries Technology.
Diversification Opportunities for Air Products and Aeries Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Aeries is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and Air Products 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 Products and are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Air Products i.e., Air Products and Aeries Technology go up and down completely randomly.
Pair Corralation between Air Products and Aeries Technology
Considering the 90-day investment horizon Air Products is expected to generate 15.83 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, Air Products and is 15.19 times less risky than Aeries Technology. It trades about 0.11 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Aeries Technology on September 1, 2024 and sell it today you would earn a total of 0.91 from holding Aeries Technology or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.13% |
| Values | Daily Returns |
Air Products and vs. Aeries Technology
Performance |
| Timeline |
| Air Products |
| Aeries Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air Products and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Aeries Technology
The main advantage of trading using opposite Air Products and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| Air Products vs. PPG Industries | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co | Air Products vs. LyondellBasell Industries NV |
| Aeries Technology vs. CRA International | Aeries Technology vs. Huron Consulting Group | Aeries Technology vs. Franklin Covey | Aeries Technology vs. ICF International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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