Correlation Between Batm Advanced and Air Products
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Air Products Chemicals, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Air Products.
Diversification Opportunities for Batm Advanced and Air Products
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batm and Air is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Air Products go up and down completely randomly.
Pair Corralation between Batm Advanced and Air Products
Assuming the 90 days trading horizon Batm Advanced is expected to generate 4.32 times less return on investment than Air Products. In addition to that, Batm Advanced is 2.29 times more volatile than Air Products Chemicals. It trades about 0.02 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 | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Air Products Chemicals
Performance |
| Timeline |
| Batm Advanced Commun |
| Air Products Chemicals |
Batm Advanced and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Air Products
The main advantage of trading using opposite Batm Advanced and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Roadside Real Estate | Batm Advanced vs. Broadridge Financial Solutions | Batm Advanced vs. Atresmedia | Batm Advanced vs. Intermediate Capital Group |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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