Correlation Between Kingboard Chemical and Air Products
Can any of the company-specific risk be diversified away by investing in both Kingboard Chemical 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 Kingboard Chemical and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingboard Chemical Holdings and Air Products and, you can compare the effects of market volatilities on Kingboard Chemical 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 Kingboard Chemical with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingboard Chemical and Air Products.
Diversification Opportunities for Kingboard Chemical and Air Products
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingboard and Air is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kingboard Chemical Holdings and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Kingboard Chemical 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 Kingboard Chemical Holdings 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 Kingboard Chemical i.e., Kingboard Chemical and Air Products go up and down completely randomly.
Pair Corralation between Kingboard Chemical and Air Products
If you would invest 28,329 in Air Products and on November 3, 2024 and sell it today you would earn a total of 5,197 from holding Air Products and or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kingboard Chemical Holdings vs. Air Products and
Performance |
| Timeline |
| Kingboard Chemical |
| Air Products |
Kingboard Chemical and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingboard Chemical and Air Products
The main advantage of trading using opposite Kingboard Chemical and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingboard Chemical 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.| Kingboard Chemical vs. Tapestry | Kingboard Chemical vs. Victorias Secret Co | Kingboard Chemical vs. Verra Mobility Corp | Kingboard Chemical vs. Capri Holdings |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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