Correlation Between CAIRN HOMES and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES and AIR PRODCHEMICALS 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 CAIRN HOMES and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and AIR PRODCHEMICALS, you can compare the effects of market volatilities on CAIRN HOMES and AIR PRODCHEMICALS 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 CAIRN HOMES with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and AIR PRODCHEMICALS.
Diversification Opportunities for CAIRN HOMES and AIR PRODCHEMICALS
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAIRN and AIR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and CAIRN HOMES 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 CAIRN HOMES EO are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of CAIRN HOMES i.e., CAIRN HOMES and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between CAIRN HOMES and AIR PRODCHEMICALS
Assuming the 90 days horizon CAIRN HOMES EO is expected to under-perform the AIR PRODCHEMICALS. In addition to that, CAIRN HOMES is 1.99 times more volatile than AIR PRODCHEMICALS. It trades about -0.17 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.52 per unit of volatility. If you would invest 27,730 in AIR PRODCHEMICALS on November 2, 2024 and sell it today you would earn a total of 3,680 from holding AIR PRODCHEMICALS or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| CAIRN HOMES EO |
| AIR PRODCHEMICALS |
CAIRN HOMES and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and AIR PRODCHEMICALS
The main advantage of trading using opposite CAIRN HOMES and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES position performs unexpectedly, AIR PRODCHEMICALS 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 PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| CAIRN HOMES vs. S E BANKEN A | CAIRN HOMES vs. MARKET VECTR RETAIL | CAIRN HOMES vs. Erste Group Bank | CAIRN HOMES vs. TRADEDOUBLER AB SK |
| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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