Correlation Between Hawkins and Air Products
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and Air Products and, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Air Products.
Diversification Opportunities for Hawkins and Air Products
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hawkins and Air is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Air Products go up and down completely randomly.
Pair Corralation between Hawkins and Air Products
Given the investment horizon of 90 days Hawkins is expected to generate 1.48 times more return on investment than Air Products. However, Hawkins is 1.48 times more volatile than Air Products and. It trades about 0.1 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 3,988 in Hawkins on November 9, 2024 and sell it today you would earn a total of 7,509 from holding Hawkins or generate 188.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. Air Products and
Performance |
| Timeline |
| Hawkins |
| Air Products |
Hawkins and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and Air Products
The main advantage of trading using opposite Hawkins and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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