Correlation Between Argo Group and Air Products
Can any of the company-specific risk be diversified away by investing in both Argo Group and Air Products 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 Argo Group and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Limited and Air Products Chemicals, you can compare the effects of market volatilities on Argo Group and Air Products 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 Argo Group with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Air Products.
Diversification Opportunities for Argo Group and Air Products
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Argo and Air is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and Argo Group 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 Argo Group Limited are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Argo Group i.e., Argo Group and Air Products go up and down completely randomly.
Pair Corralation between Argo Group and Air Products
Assuming the 90 days trading horizon Argo Group is expected to generate 12.89 times less return on investment than Air Products. In addition to that, Argo Group is 1.75 times more volatile than Air Products Chemicals. It trades about 0.01 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.21 per unit of volatility. If you would invest 31,569 in Air Products Chemicals on August 30, 2024 and sell it today you would earn a total of 1,770 from holding Air Products Chemicals or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Argo Group Limited vs. Air Products Chemicals
Performance |
| Timeline |
| Argo Group Limited |
| Air Products Chemicals |
Argo Group and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Air Products
The main advantage of trading using opposite Argo Group and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Argo Group vs. Optima Health plc | Argo Group vs. Spire Healthcare Group | Argo Group vs. Universal Music Group | Argo Group vs. Naturhouse Health SA |
| Air Products vs. Tungsten West PLC | Air Products vs. Argo Group Limited | Air Products vs. Hardide PLC | Air Products vs. Versarien PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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