Correlation Between Air Products and Mosaic
Can any of the company-specific risk be diversified away by investing in both Air Products and Mosaic 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 Mosaic 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 The Mosaic, you can compare the effects of market volatilities on Air Products and Mosaic 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 Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Mosaic.
Diversification Opportunities for Air Products and Mosaic
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Mosaic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Air Products i.e., Air Products and Mosaic go up and down completely randomly.
Pair Corralation between Air Products and Mosaic
Considering the 90-day investment horizon Air Products and is expected to generate 0.38 times more return on investment than Mosaic. However, Air Products and is 2.64 times less risky than Mosaic. It trades about 0.31 of its potential returns per unit of risk. The Mosaic is currently generating about -0.09 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. The Mosaic
Performance |
| Timeline |
| Air Products |
| Mosaic |
Air Products and Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Mosaic
The main advantage of trading using opposite Air Products and Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Mosaic 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 Mosaic will offset losses from the drop in Mosaic'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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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