Correlation Between FC Investment and Air Products
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Air Products Chemicals, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Air Products.
Diversification Opportunities for FC Investment and Air Products
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FCIT and Air is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Air Products go up and down completely randomly.
Pair Corralation between FC Investment and Air Products
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.94 times more return on investment than Air Products. However, FC Investment Trust is 1.06 times less risky than Air Products. It trades about -0.05 of its potential returns per unit of risk. Air Products Chemicals is currently generating about -0.93 per unit of risk. If you would invest 112,000 in FC Investment Trust on September 24, 2024 and sell it today you would lose (800.00) from holding FC Investment Trust or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Air Products Chemicals
Performance |
| Timeline |
| FC Investment Trust |
| Air Products Chemicals |
FC Investment and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Air Products
The main advantage of trading using opposite FC Investment and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Samsung Electronics Co | FC Investment vs. Samsung Electronics Co | FC Investment vs. Hyundai Motor | FC Investment vs. Toyota Motor Corp |
| Air Products vs. FC Investment Trust | Air Products vs. Axway Software SA | Air Products vs. Livermore Investments Group | Air Products vs. Atresmedia |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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