Correlation Between Plexus Corp and Air Products
Can any of the company-specific risk be diversified away by investing in both Plexus Corp 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 Plexus Corp and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Air Products and, you can compare the effects of market volatilities on Plexus Corp 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 Plexus Corp with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Air Products.
Diversification Opportunities for Plexus Corp and Air Products
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plexus and Air is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Plexus Corp 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 Plexus Corp 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 Plexus Corp i.e., Plexus Corp and Air Products go up and down completely randomly.
Pair Corralation between Plexus Corp and Air Products
Given the investment horizon of 90 days Plexus Corp is expected to under-perform the Air Products. But the stock apears to be less risky and, when comparing its historical volatility, Plexus Corp is 1.6 times less risky than Air Products. The stock trades about -0.34 of its potential returns per unit of risk. The Air Products and is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 32,662 in Air Products and on November 28, 2024 and sell it today you would lose (1,723) from holding Air Products and or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Air Products and
Performance |
| Timeline |
| Plexus Corp |
| Air Products |
Plexus Corp and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Air Products
The main advantage of trading using opposite Plexus Corp and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp 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.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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