Correlation Between Constellation Brands and Airgas
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Airgas 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 Constellation Brands and Airgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Airgas Inc, you can compare the effects of market volatilities on Constellation Brands and Airgas 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 Constellation Brands with a short position of Airgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Airgas.
Diversification Opportunities for Constellation Brands and Airgas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Constellation and Airgas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Airgas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgas Inc and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Airgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgas Inc has no effect on the direction of Constellation Brands i.e., Constellation Brands and Airgas go up and down completely randomly.
Pair Corralation between Constellation Brands and Airgas
If you would invest (100.00) in Airgas Inc on December 4, 2024 and sell it today you would earn a total of 100.00 from holding Airgas Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Constellation Brands Class vs. Airgas Inc
Performance |
| Timeline |
| Constellation Brands |
| Airgas Inc |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Constellation Brands and Airgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Airgas
The main advantage of trading using opposite Constellation Brands and Airgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Airgas 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 Airgas will offset losses from the drop in Airgas' long position.| Constellation Brands vs. Brown Forman | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman | Constellation Brands vs. Diageo PLC ADR |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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