Correlation Between Air Products and Ecovyst
Can any of the company-specific risk be diversified away by investing in both Air Products and Ecovyst 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 Ecovyst 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 Ecovyst, you can compare the effects of market volatilities on Air Products and Ecovyst 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 Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Ecovyst.
Diversification Opportunities for Air Products and Ecovyst
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and Ecovyst is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Air Products i.e., Air Products and Ecovyst go up and down completely randomly.
Pair Corralation between Air Products and Ecovyst
Considering the 90-day investment horizon Air Products is expected to generate 35.01 times less return on investment than Ecovyst. But when comparing it to its historical volatility, Air Products and is 3.44 times less risky than Ecovyst. It trades about 0.03 of its potential returns per unit of risk. Ecovyst is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 634.00 in Ecovyst on August 24, 2024 and sell it today you would earn a total of 186.00 from holding Ecovyst or generate 29.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Products and vs. Ecovyst
Performance |
| Timeline |
| Air Products |
| Ecovyst |
Air Products and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Ecovyst
The main advantage of trading using opposite Air Products and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Ecovyst 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 Ecovyst will offset losses from the drop in Ecovyst's long position.| Air Products vs. Eshallgo Class A | Air Products vs. Amtech Systems | Air Products vs. Gold Fields Ltd | Air Products vs. Aegean Airlines SA |
| Ecovyst vs. Eshallgo Class A | Ecovyst vs. Amtech Systems | Ecovyst vs. Gold Fields Ltd | Ecovyst vs. Aegean Airlines SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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