Correlation Between Air Products and DigiCom Berhad
Can any of the company-specific risk be diversified away by investing in both Air Products and DigiCom Berhad 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 DigiCom Berhad 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 DigiCom Berhad, you can compare the effects of market volatilities on Air Products and DigiCom Berhad 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 DigiCom Berhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and DigiCom Berhad.
Diversification Opportunities for Air Products and DigiCom Berhad
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and DigiCom is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and DigiCom Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiCom Berhad 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 DigiCom Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiCom Berhad has no effect on the direction of Air Products i.e., Air Products and DigiCom Berhad go up and down completely randomly.
Pair Corralation between Air Products and DigiCom Berhad
If you would invest 26,745 in Air Products and on September 1, 2024 and sell it today you would earn a total of 6,688 from holding Air Products and or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Air Products and vs. DigiCom Berhad
Performance |
| Timeline |
| Air Products |
| DigiCom Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air Products and DigiCom Berhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and DigiCom Berhad
The main advantage of trading using opposite Air Products and DigiCom Berhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, DigiCom Berhad 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 DigiCom Berhad will offset losses from the drop in DigiCom Berhad'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 |
| DigiCom Berhad vs. China Tontine Wines | DigiCom Berhad vs. Uber Technologies | DigiCom Berhad vs. Oatly Group AB | DigiCom Berhad vs. Diageo PLC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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