Correlation Between Oxford Metrics and Air Products
Can any of the company-specific risk be diversified away by investing in both Oxford Metrics 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 Oxford Metrics and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Metrics plc and Air Products Chemicals, you can compare the effects of market volatilities on Oxford Metrics 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 Oxford Metrics with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Metrics and Air Products.
Diversification Opportunities for Oxford Metrics and Air Products
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxford and Air is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Metrics plc 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 Oxford Metrics 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 Oxford Metrics plc 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 Oxford Metrics i.e., Oxford Metrics and Air Products go up and down completely randomly.
Pair Corralation between Oxford Metrics and Air Products
Assuming the 90 days trading horizon Oxford Metrics plc is expected to under-perform the Air Products. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Metrics plc is 3.6 times less risky than Air Products. The stock trades about -0.14 of its potential returns per unit of risk. The Air Products Chemicals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 26,924 in Air Products Chemicals on September 13, 2024 and sell it today you would earn a total of 4,294 from holding Air Products Chemicals or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Metrics plc vs. Air Products Chemicals
Performance |
| Timeline |
| Oxford Metrics plc |
| Air Products Chemicals |
Oxford Metrics and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Metrics and Air Products
The main advantage of trading using opposite Oxford Metrics and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Metrics 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.| Oxford Metrics vs. Lloyds Banking Group | Oxford Metrics vs. Applied Materials | Oxford Metrics vs. Martin Marietta Materials | Oxford Metrics vs. Edita Food Industries |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |