Correlation Between Synthomer Plc and Air Products
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc 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 Synthomer Plc and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Air Products Chemicals, you can compare the effects of market volatilities on Synthomer Plc 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 Synthomer Plc with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Air Products.
Diversification Opportunities for Synthomer Plc and Air Products
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Synthomer and Air is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer 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 Synthomer Plc 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 Synthomer 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 Synthomer Plc i.e., Synthomer Plc and Air Products go up and down completely randomly.
Pair Corralation between Synthomer Plc and Air Products
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Air Products. In addition to that, Synthomer Plc is 2.5 times more volatile than Air Products Chemicals. It trades about -0.09 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.01 per unit of volatility. If you would invest 31,166 in Air Products Chemicals on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Air Products Chemicals or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthomer plc vs. Air Products Chemicals
Performance |
| Timeline |
| Synthomer plc |
| Air Products Chemicals |
Synthomer Plc and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Air Products
The main advantage of trading using opposite Synthomer Plc and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc 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.| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Ferrexpo PLC | Synthomer Plc vs. Atalaya Mining |
| Air Products vs. Hong Kong Land | Air Products vs. Neometals | Air Products vs. Coor Service Management | Air Products vs. Fidelity Sustainable USD |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |