Correlation Between Air Products and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Air Products and Dine Brands 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 Dine Brands 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 Dine Brands Global, you can compare the effects of market volatilities on Air Products and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Dine Brands.
Diversification Opportunities for Air Products and Dine Brands
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Dine is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Air Products i.e., Air Products and Dine Brands go up and down completely randomly.
Pair Corralation between Air Products and Dine Brands
Considering the 90-day investment horizon Air Products and is expected to generate 0.3 times more return on investment than Dine Brands. However, Air Products and is 3.3 times less risky than Dine Brands. It trades about -0.45 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.15 per unit of risk. If you would invest 32,789 in Air Products and on September 19, 2024 and sell it today you would lose (2,318) from holding Air Products and or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Dine Brands Global
Performance |
| Timeline |
| Air Products |
| Dine Brands Global |
Air Products and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Dine Brands
The main advantage of trading using opposite Air Products and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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