Correlation Between Air Products and FutureFuel Corp
Can any of the company-specific risk be diversified away by investing in both Air Products and FutureFuel 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 FutureFuel 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 FutureFuel Corp, you can compare the effects of market volatilities on Air Products and FutureFuel 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 FutureFuel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and FutureFuel Corp.
Diversification Opportunities for Air Products and FutureFuel Corp
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and FutureFuel is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and FutureFuel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FutureFuel 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 FutureFuel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FutureFuel Corp has no effect on the direction of Air Products i.e., Air Products and FutureFuel Corp go up and down completely randomly.
Pair Corralation between Air Products and FutureFuel Corp
Considering the 90-day investment horizon Air Products and is expected to generate 0.23 times more return on investment than FutureFuel Corp. However, Air Products and is 4.28 times less risky than FutureFuel Corp. It trades about 0.31 of its potential returns per unit of risk. FutureFuel Corp is currently generating about -0.15 per unit of risk. If you would invest 31,277 in Air Products and on August 31, 2024 and sell it today you would earn a total of 2,045 from holding Air Products and or generate 6.54% 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. FutureFuel Corp
Performance |
| Timeline |
| Air Products |
| FutureFuel Corp |
Air Products and FutureFuel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and FutureFuel Corp
The main advantage of trading using opposite Air Products and FutureFuel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, FutureFuel 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 FutureFuel Corp will offset losses from the drop in FutureFuel Corp's long position.| Air Products vs. Eastman Chemical | Air Products vs. Linde plc Ordinary | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co |
| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Quaker Chemical | FutureFuel Corp vs. Ecovyst | FutureFuel Corp vs. Minerals Technologies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |