Correlation Between Air Products and Boston Omaha
Can any of the company-specific risk be diversified away by investing in both Air Products and Boston Omaha 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 Boston Omaha 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 Boston Omaha Corp, you can compare the effects of market volatilities on Air Products and Boston Omaha 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 Boston Omaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Boston Omaha.
Diversification Opportunities for Air Products and Boston Omaha
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and Boston is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp 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 Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of Air Products i.e., Air Products and Boston Omaha go up and down completely randomly.
Pair Corralation between Air Products and Boston Omaha
Considering the 90-day investment horizon Air Products and is expected to generate 0.88 times more return on investment than Boston Omaha. However, Air Products and is 1.14 times less risky than Boston Omaha. It trades about 0.04 of its potential returns per unit of risk. Boston Omaha Corp is currently generating about 0.01 per unit of risk. If you would invest 26,502 in Air Products and on September 14, 2024 and sell it today you would earn a total of 4,434 from holding Air Products and or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Boston Omaha Corp
Performance |
| Timeline |
| Air Products |
| Boston Omaha Corp |
Air Products and Boston Omaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Boston Omaha
The main advantage of trading using opposite Air Products and Boston Omaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Boston Omaha 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 Boston Omaha will offset losses from the drop in Boston Omaha's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Boston Omaha vs. Mirriad Advertising plc | Boston Omaha vs. INEO Tech Corp | Boston Omaha vs. Kidoz Inc | Boston Omaha vs. Marchex |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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