Correlation Between Air Products and Oil Dri
Can any of the company-specific risk be diversified away by investing in both Air Products and Oil Dri 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 Oil Dri 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 Oil Dri, you can compare the effects of market volatilities on Air Products and Oil Dri 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 Oil Dri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Oil Dri.
Diversification Opportunities for Air Products and Oil Dri
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Oil is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Oil Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Dri 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 Oil Dri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Dri has no effect on the direction of Air Products i.e., Air Products and Oil Dri go up and down completely randomly.
Pair Corralation between Air Products and Oil Dri
Considering the 90-day investment horizon Air Products is expected to generate 5.37 times less return on investment than Oil Dri. But when comparing it to its historical volatility, Air Products and is 1.4 times less risky than Oil Dri. It trades about 0.02 of its potential returns per unit of risk. Oil Dri is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,184 in Oil Dri on August 24, 2024 and sell it today you would earn a total of 3,877 from holding Oil Dri or generate 121.77% 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. Oil Dri
Performance |
| Timeline |
| Air Products |
| Oil Dri |
Air Products and Oil Dri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Oil Dri
The main advantage of trading using opposite Air Products and Oil Dri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Oil Dri 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 Oil Dri will offset losses from the drop in Oil Dri'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 |
| Oil Dri vs. H B Fuller | Oil Dri vs. Minerals Technologies | Oil Dri vs. Quaker Chemical | Oil Dri vs. Sensient 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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