Correlation Between Air Products and Science In

Can any of the company-specific risk be diversified away by investing in both Air Products and Science In 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 Air Products and Science In into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Products Chemicals and Science in Sport, you can compare the effects of market volatilities on Air Products and Science In 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 Air Products with a short position of Science In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Science In.

Diversification Opportunities for Air Products and Science In

0.57

Correlation Coefficient

Air Products  Science In

Very weak diversification

The 3 months correlation between Air and Science is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Science in Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science in Sport and Air Products 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 Air Products Chemicals are associated (or correlated) with Science In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science in Sport has no effect on the direction of Air Products i.e., Air Products and Science In go up and down completely randomly.

Pair Corralation between Air Products and Science In

Assuming the 90 days trading horizon Air Products Chemicals is expected to under-perform the Science In. But the stock apears to be less risky and, when comparing its historical volatility, Air Products Chemicals is 1.49 times less risky than Science In. The stock trades about -0.42 of its potential returns per unit of risk. The Science in Sport is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,650  in Science in Sport on September 18, 2024 and sell it today you would lose (50.00) from holding Science in Sport or give up 1.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Air Products Chemicals  vs.  Science in Sport

Air Products Chemicals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Products Chemicals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Air Products may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Science in Sport

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Science in Sport are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Science In may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Air Products and Science In

The main advantage of trading using opposite Air Products and Science In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Science In 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 Science In will offset losses from the drop in Science In's long position.

The idea behind Air Products Chemicals and Science in Sport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.