Correlation Between Air Products and Umpqua Holdings

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy9.31%
ValuesDaily Returns

Air Products and  vs.  Umpqua Holdings

 Performance 
       Timeline  
Air Products 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Air Products and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Air Products may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Umpqua Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Umpqua Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Umpqua Holdings is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

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.
The idea behind Air Products and and Umpqua Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format