Correlation Between Air Products and Croda International
Can any of the company-specific risk be diversified away by investing in both Air Products and Croda International 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 Croda International 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 Croda International PLC, you can compare the effects of market volatilities on Air Products and Croda International 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 Croda International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Croda International.
Diversification Opportunities for Air Products and Croda International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Croda is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Croda International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croda International PLC 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 Croda International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croda International PLC has no effect on the direction of Air Products i.e., Air Products and Croda International go up and down completely randomly.
Pair Corralation between Air Products and Croda International
Considering the 90-day investment horizon Air Products and is expected to generate 1.0 times more return on investment than Croda International. However, Air Products and is 1.0 times less risky than Croda International. It trades about 0.06 of its potential returns per unit of risk. Croda International PLC is currently generating about -0.07 per unit of risk. If you would invest 26,834 in Air Products and on August 25, 2024 and sell it today you would earn a total of 6,349 from holding Air Products and or generate 23.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Croda International PLC
Performance |
| Timeline |
| Air Products |
| Croda International PLC |
Air Products and Croda International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Croda International
The main advantage of trading using opposite Air Products and Croda International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Croda International 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 Croda International will offset losses from the drop in Croda International's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Croda International vs. First Graphene | Croda International vs. HUMANA INC | Croda International vs. Aquagold International | Croda International vs. Barloworld Ltd ADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |