Correlation Between Core Molding and Air Products
Can any of the company-specific risk be diversified away by investing in both Core Molding 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 Core Molding and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Molding Technologies and Air Products and, you can compare the effects of market volatilities on Core Molding 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 Core Molding with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Molding and Air Products.
Diversification Opportunities for Core Molding and Air Products
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Core and Air is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Core Molding 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 Core Molding Technologies 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 has no effect on the direction of Core Molding i.e., Core Molding and Air Products go up and down completely randomly.
Pair Corralation between Core Molding and Air Products
Considering the 90-day investment horizon Core Molding Technologies is expected to under-perform the Air Products. In addition to that, Core Molding is 1.6 times more volatile than Air Products and. It trades about -0.05 of its total potential returns per unit of risk. Air Products and is currently generating about 0.19 per unit of volatility. If you would invest 27,422 in Air Products and on August 23, 2024 and sell it today you would earn a total of 5,463 from holding Air Products and or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Molding Technologies vs. Air Products and
Performance |
| Timeline |
| Core Molding Technologies |
| Air Products |
Core Molding and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Molding and Air Products
The main advantage of trading using opposite Core Molding and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Molding 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.| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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