Correlation Between Intuitive Investments and Air Products
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments 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 Intuitive Investments and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and Air Products Chemicals, you can compare the effects of market volatilities on Intuitive Investments 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 Intuitive Investments with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Air Products.
Diversification Opportunities for Intuitive Investments and Air Products
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Intuitive and Air is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group 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 Intuitive Investments 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 Intuitive Investments 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 Chemicals has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Air Products go up and down completely randomly.
Pair Corralation between Intuitive Investments and Air Products
Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the Air Products. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Investments Group is 1.88 times less risky than Air Products. The stock trades about -0.36 of its potential returns per unit of risk. The Air Products Chemicals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 32,127 in Air Products Chemicals on August 25, 2024 and sell it today you would earn a total of 944.00 from holding Air Products Chemicals or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Air Products Chemicals
Performance |
| Timeline |
| Intuitive Investments |
| Air Products Chemicals |
Intuitive Investments and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Air Products
The main advantage of trading using opposite Intuitive Investments and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments 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.| Intuitive Investments vs. Cardinal Health | Intuitive Investments vs. Beowulf Mining | Intuitive Investments vs. Wheaton Precious Metals | Intuitive Investments vs. Optima Health plc |
| Air Products vs. Samsung Electronics Co | Air Products vs. Samsung Electronics Co | Air Products vs. Hyundai Motor | Air Products vs. Toyota Motor 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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