Correlation Between Air Products and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Air Products and Arkema SA 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 Arkema SA 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 Arkema SA, you can compare the effects of market volatilities on Air Products and Arkema SA 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 Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Arkema SA.
Diversification Opportunities for Air Products and Arkema SA
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Arkema is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Arkema SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA 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 Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA has no effect on the direction of Air Products i.e., Air Products and Arkema SA go up and down completely randomly.
Pair Corralation between Air Products and Arkema SA
Considering the 90-day investment horizon Air Products and is expected to generate 1.11 times more return on investment than Arkema SA. However, Air Products is 1.11 times more volatile than Arkema SA. It trades about 0.04 of its potential returns per unit of risk. Arkema SA is currently generating about -0.01 per unit of risk. If you would invest 27,264 in Air Products and on August 31, 2024 and sell it today you would earn a total of 6,169 from holding Air Products and or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 51.6% |
| Values | Daily Returns |
Air Products and vs. Arkema SA
Performance |
| Timeline |
| Air Products |
| Arkema SA |
Air Products and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Arkema SA
The main advantage of trading using opposite Air Products and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Air Products vs. Eastman Chemical | Air Products vs. Linde plc Ordinary | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co |
| Arkema SA vs. Vita Coco | Arkema SA vs. China Tontine Wines | Arkema SA vs. Highway Holdings Limited | Arkema SA vs. SNDL Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |