Correlation Between CN Energy and Air Products
Can any of the company-specific risk be diversified away by investing in both CN Energy 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 CN Energy and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN Energy Group and Air Products and, you can compare the effects of market volatilities on CN Energy 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 CN Energy with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN Energy and Air Products.
Diversification Opportunities for CN Energy and Air Products
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNEY and Air is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CN Energy Group and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and CN Energy 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 CN Energy Group 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 CN Energy i.e., CN Energy and Air Products go up and down completely randomly.
Pair Corralation between CN Energy and Air Products
Given the investment horizon of 90 days CN Energy Group is expected to generate 12.59 times more return on investment than Air Products. However, CN Energy is 12.59 times more volatile than Air Products and. It trades about 0.02 of its potential returns per unit of risk. Air Products and is currently generating about 0.04 per unit of risk. If you would invest 315.00 in CN Energy Group on September 4, 2024 and sell it today you would lose (282.00) from holding CN Energy Group or give up 89.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN Energy Group vs. Air Products and
Performance |
| Timeline |
| CN Energy Group |
| Air Products |
CN Energy and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN Energy and Air Products
The main advantage of trading using opposite CN Energy and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN Energy 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.| CN Energy vs. Orion Engineered Carbons | CN Energy vs. Cabot | CN Energy vs. Minerals Technologies | CN Energy vs. Quaker Chemical |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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