Correlation Between Air Products and Fuchs Petrolub
Can any of the company-specific risk be diversified away by investing in both Air Products and Fuchs Petrolub 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 Fuchs Petrolub 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 Fuchs Petrolub SE, you can compare the effects of market volatilities on Air Products and Fuchs Petrolub 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 Fuchs Petrolub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Fuchs Petrolub.
Diversification Opportunities for Air Products and Fuchs Petrolub
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Fuchs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Fuchs Petrolub SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuchs Petrolub SE 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 Fuchs Petrolub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuchs Petrolub SE has no effect on the direction of Air Products i.e., Air Products and Fuchs Petrolub go up and down completely randomly.
Pair Corralation between Air Products and Fuchs Petrolub
Considering the 90-day investment horizon Air Products and is expected to generate 0.55 times more return on investment than Fuchs Petrolub. However, Air Products and is 1.81 times less risky than Fuchs Petrolub. It trades about 0.5 of its potential returns per unit of risk. Fuchs Petrolub SE is currently generating about -0.27 per unit of risk. If you would invest 30,609 in Air Products and on September 4, 2024 and sell it today you would earn a total of 2,953 from holding Air Products and or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Fuchs Petrolub SE
Performance |
| Timeline |
| Air Products |
| Fuchs Petrolub SE |
Air Products and Fuchs Petrolub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Fuchs Petrolub
The main advantage of trading using opposite Air Products and Fuchs Petrolub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Fuchs Petrolub 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 Fuchs Petrolub will offset losses from the drop in Fuchs Petrolub's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Fuchs Petrolub vs. Covestro ADR | Fuchs Petrolub vs. Fresenius SE Co | Fuchs Petrolub vs. Secom Co Ltd | Fuchs Petrolub vs. Alfa Laval AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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