Correlation Between Air Products and Umpqua Holdings
Can any of the company-specific risk be diversified away by investing in both Air Products and Umpqua Holdings 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 Umpqua Holdings 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 Umpqua Holdings, you can compare the effects of market volatilities on Air Products and Umpqua Holdings 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 Umpqua Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Umpqua Holdings.
Diversification Opportunities for Air Products and Umpqua Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Umpqua is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Umpqua Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umpqua Holdings 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 Umpqua Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umpqua Holdings has no effect on the direction of Air Products i.e., Air Products and Umpqua Holdings go up and down completely randomly.
Pair Corralation between Air Products and Umpqua Holdings
Considering the 90-day investment horizon Air Products is expected to generate 2.36 times less return on investment than Umpqua Holdings. In addition to that, Air Products is 1.06 times more volatile than Umpqua Holdings. It trades about 0.01 of its total potential returns per unit of risk. Umpqua Holdings is currently generating about 0.04 per unit of volatility. If you would invest 1,729 in Umpqua Holdings on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Umpqua Holdings or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.31% |
| Values | Daily Returns |
Air Products and vs. Umpqua Holdings
Performance |
| Timeline |
| Air Products |
| Umpqua Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air Products and Umpqua Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Umpqua Holdings
The main advantage of trading using opposite Air Products and Umpqua Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Umpqua Holdings 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 Umpqua Holdings will offset losses from the drop in Umpqua Holdings' long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Umpqua Holdings vs. Cadence Design Systems | Umpqua Holdings vs. Sapiens International | Umpqua Holdings vs. Uber Technologies | Umpqua Holdings vs. Herc Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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