Correlation Between Young Cos and Air Products
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Air Products Chemicals, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Air Products.
Diversification Opportunities for Young Cos and Air Products
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Young and Air is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Air Products go up and down completely randomly.
Pair Corralation between Young Cos and Air Products
Assuming the 90 days trading horizon Young Cos is expected to generate 1.37 times less return on investment than Air Products. In addition to that, Young Cos is 1.32 times more volatile than Air Products Chemicals. It trades about 0.13 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.23 per unit of volatility. If you would invest 31,616 in Air Products Chemicals on August 28, 2024 and sell it today you would earn a total of 1,875 from holding Air Products Chemicals or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. Air Products Chemicals
Performance |
| Timeline |
| Young Cos Brewery |
| Air Products Chemicals |
Young Cos and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Air Products
The main advantage of trading using opposite Young Cos and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co | Young Cos vs. Toyota Motor Corp | Young Cos vs. Hon Hai Precision |
| Air Products vs. Impax Environmental Markets | Air Products vs. JD Sports Fashion | Air Products vs. Seche Environnement SA | Air Products vs. Lowland Investment Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |