Correlation Between FLOW TRADERS and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and AIR PRODCHEMICALS 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 FLOW TRADERS and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and AIR PRODCHEMICALS, you can compare the effects of market volatilities on FLOW TRADERS and AIR PRODCHEMICALS 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 FLOW TRADERS with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and AIR PRODCHEMICALS.
Diversification Opportunities for FLOW TRADERS and AIR PRODCHEMICALS
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FLOW and AIR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between FLOW TRADERS and AIR PRODCHEMICALS
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 2.71 times more return on investment than AIR PRODCHEMICALS. However, FLOW TRADERS is 2.71 times more volatile than AIR PRODCHEMICALS. It trades about 0.27 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about -0.59 per unit of risk. If you would invest 2,106 in FLOW TRADERS LTD on October 12, 2024 and sell it today you would earn a total of 216.00 from holding FLOW TRADERS LTD or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| FLOW TRADERS LTD |
| AIR PRODCHEMICALS |
FLOW TRADERS and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and AIR PRODCHEMICALS
The main advantage of trading using opposite FLOW TRADERS and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, AIR PRODCHEMICALS 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 PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| FLOW TRADERS vs. Nufarm Limited | FLOW TRADERS vs. Australian Agricultural | FLOW TRADERS vs. Daito Trust Construction | FLOW TRADERS vs. Chongqing Machinery Electric |
| AIR PRODCHEMICALS vs. TRADELINK ELECTRON | AIR PRODCHEMICALS vs. Addtech AB | AIR PRODCHEMICALS vs. FLOW TRADERS LTD | AIR PRODCHEMICALS vs. VELA TECHNOLPLC LS 0001 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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