Correlation Between Marwyn Value and Air Products
Can any of the company-specific risk be diversified away by investing in both Marwyn Value 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 Marwyn Value and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marwyn Value Investors and Air Products Chemicals, you can compare the effects of market volatilities on Marwyn Value 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 Marwyn Value with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marwyn Value and Air Products.
Diversification Opportunities for Marwyn Value and Air Products
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marwyn and Air is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Marwyn Value Investors 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 Marwyn Value 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 Marwyn Value Investors 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 Marwyn Value i.e., Marwyn Value and Air Products go up and down completely randomly.
Pair Corralation between Marwyn Value and Air Products
Assuming the 90 days trading horizon Marwyn Value is expected to generate 1.92 times less return on investment than Air Products. But when comparing it to its historical volatility, Marwyn Value Investors is 5.79 times less risky than Air Products. It trades about 0.06 of its potential returns per unit of risk. Air Products Chemicals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30,952 in Air Products Chemicals on October 7, 2024 and sell it today you would lose (2,403) from holding Air Products Chemicals or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marwyn Value Investors vs. Air Products Chemicals
Performance |
| Timeline |
| Marwyn Value Investors |
| Air Products Chemicals |
Marwyn Value and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marwyn Value and Air Products
The main advantage of trading using opposite Marwyn Value and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marwyn Value 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.| Marwyn Value vs. Foresight Environmental Infrastructure | Marwyn Value vs. Dentsply Sirona | Marwyn Value vs. Batm Advanced Communications | Marwyn Value vs. United Internet AG |
| Air Products vs. Cardinal Health | Air Products vs. Batm Advanced Communications | Air Products vs. Verizon Communications | Air Products vs. Westlake Chemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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