Correlation Between Air Products and Valens
Can any of the company-specific risk be diversified away by investing in both Air Products and Valens 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 Valens 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 Valens, you can compare the effects of market volatilities on Air Products and Valens 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 Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Valens.
Diversification Opportunities for Air Products and Valens
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Valens is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Air Products i.e., Air Products and Valens go up and down completely randomly.
Pair Corralation between Air Products and Valens
Considering the 90-day investment horizon Air Products and is expected to generate 0.4 times more return on investment than Valens. However, Air Products and is 2.49 times less risky than Valens. It trades about 0.11 of its potential returns per unit of risk. Valens is currently generating about -0.04 per unit of risk. If you would invest 26,685 in Air Products and on September 2, 2024 and sell it today you would earn a total of 6,748 from holding Air Products and or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Valens
Performance |
| Timeline |
| Air Products |
| Valens |
Air Products and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Valens
The main advantage of trading using opposite Air Products and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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