Correlation Between SAFETY MEDICAL and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL 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 SAFETY MEDICAL and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and AIR PRODCHEMICALS, you can compare the effects of market volatilities on SAFETY MEDICAL 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 SAFETY MEDICAL with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and AIR PRODCHEMICALS.
Diversification Opportunities for SAFETY MEDICAL and AIR PRODCHEMICALS
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAFETY and AIR is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and SAFETY MEDICAL 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 SAFETY MEDICAL PROD 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 SAFETY MEDICAL i.e., SAFETY MEDICAL and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and AIR PRODCHEMICALS
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the AIR PRODCHEMICALS. In addition to that, SAFETY MEDICAL is 2.03 times more volatile than AIR PRODCHEMICALS. It trades about -0.01 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.02 per unit of volatility. If you would invest 28,331 in AIR PRODCHEMICALS on August 28, 2024 and sell it today you would earn a total of 3,279 from holding AIR PRODCHEMICALS or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| AIR PRODCHEMICALS |
SAFETY MEDICAL and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and AIR PRODCHEMICALS
The main advantage of trading using opposite SAFETY MEDICAL and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL 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.| SAFETY MEDICAL vs. PARKEN Sport Entertainment | SAFETY MEDICAL vs. REINET INVESTMENTS SCA | SAFETY MEDICAL vs. HK Electric Investments | SAFETY MEDICAL vs. Aluminum of |
| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Microsoft |
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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