Correlation Between Air Products and Perimeter Solutions
Can any of the company-specific risk be diversified away by investing in both Air Products and Perimeter Solutions 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 Perimeter Solutions 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 Perimeter Solutions SA, you can compare the effects of market volatilities on Air Products and Perimeter Solutions 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 Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Perimeter Solutions.
Diversification Opportunities for Air Products and Perimeter Solutions
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Perimeter is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions 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 Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of Air Products i.e., Air Products and Perimeter Solutions go up and down completely randomly.
Pair Corralation between Air Products and Perimeter Solutions
Considering the 90-day investment horizon Air Products and is expected to generate 0.27 times more return on investment than Perimeter Solutions. However, Air Products and is 3.64 times less risky than Perimeter Solutions. It trades about 0.2 of its potential returns per unit of risk. Perimeter Solutions SA is currently generating about -0.02 per unit of risk. If you would invest 31,826 in Air Products and on August 27, 2024 and sell it today you would earn a total of 1,357 from holding Air Products and or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Perimeter Solutions SA
Performance |
| Timeline |
| Air Products |
| Perimeter Solutions |
Air Products and Perimeter Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Perimeter Solutions
The main advantage of trading using opposite Air Products and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.| Air Products vs. PPG Industries | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co | Air Products vs. LyondellBasell Industries NV |
| Perimeter Solutions vs. Orion Engineered Carbons | Perimeter Solutions vs. Cabot | Perimeter Solutions vs. Minerals Technologies | Perimeter Solutions vs. Quaker Chemical |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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