Correlation Between Air Products and Endocan Corp
Can any of the company-specific risk be diversified away by investing in both Air Products and Endocan Corp 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 Endocan Corp 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 Endocan Corp, you can compare the effects of market volatilities on Air Products and Endocan Corp 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 Endocan Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Endocan Corp.
Diversification Opportunities for Air Products and Endocan Corp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Endocan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Endocan Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endocan 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 Endocan Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endocan Corp has no effect on the direction of Air Products i.e., Air Products and Endocan Corp go up and down completely randomly.
Pair Corralation between Air Products and Endocan Corp
Considering the 90-day investment horizon Air Products is expected to generate 612.15 times less return on investment than Endocan Corp. But when comparing it to its historical volatility, Air Products and is 160.73 times less risky than Endocan Corp. It trades about 0.07 of its potential returns per unit of risk. Endocan Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Endocan Corp on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Endocan Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Endocan Corp
Performance |
| Timeline |
| Air Products |
| Endocan Corp |
Air Products and Endocan Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Endocan Corp
The main advantage of trading using opposite Air Products and Endocan Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Endocan Corp 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 Endocan Corp will offset losses from the drop in Endocan Corp's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Endocan Corp vs. G6 Materials Corp | Endocan Corp vs. Versarien plc | Endocan Corp vs. Graphene Manufacturing Group | Endocan Corp vs. 5E Advanced Materials |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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