Correlation Between Oakley Capital and Air Products
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Air Products Chemicals, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Air Products.
Diversification Opportunities for Oakley Capital and Air Products
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakley and Air is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments 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 Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Air Products go up and down completely randomly.
Pair Corralation between Oakley Capital and Air Products
Assuming the 90 days trading horizon Oakley Capital is expected to generate 13.48 times less return on investment than Air Products. But when comparing it to its historical volatility, Oakley Capital Investments is 1.69 times less risky than Air Products. It trades about 0.02 of its potential returns per unit of risk. Air Products Chemicals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 27,681 in Air Products Chemicals on September 12, 2024 and sell it today you would earn a total of 3,537 from holding Air Products Chemicals or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakley Capital Investments vs. Air Products Chemicals
Performance |
| Timeline |
| Oakley Capital Inves |
| Air Products Chemicals |
Oakley Capital and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Air Products
The main advantage of trading using opposite Oakley Capital and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Spirent Communications plc | Oakley Capital vs. European Metals Holdings | Oakley Capital vs. Zegona Communications Plc | Oakley Capital vs. mobilezone holding AG |
| Air Products vs. Oakley Capital Investments | Air Products vs. Aurora Investment Trust | Air Products vs. New Residential Investment | Air Products vs. Liontrust Asset Management |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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