Correlation Between Air Products and Croda International
Can any of the company-specific risk be diversified away by investing in both Air Products and Croda International 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 Croda International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Croda International PLC, you can compare the effects of market volatilities on Air Products and Croda International 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 Croda International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Croda International.
Diversification Opportunities for Air Products and Croda International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Croda is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Croda International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croda International PLC 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 and are associated (or correlated) with Croda International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croda International PLC has no effect on the direction of Air Products i.e., Air Products and Croda International go up and down completely randomly.
Pair Corralation between Air Products and Croda International
Considering the 90-day investment horizon Air Products and is expected to generate 0.8 times more return on investment than Croda International. However, Air Products and is 1.24 times less risky than Croda International. It trades about 0.13 of its potential returns per unit of risk. Croda International PLC is currently generating about -0.11 per unit of risk. If you would invest 27,836 in Air Products and on September 12, 2024 and sell it today you would earn a total of 3,450 from holding Air Products and or generate 12.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Products and vs. Croda International PLC
Performance |
Timeline |
Air Products |
Croda International PLC |
Air Products and Croda International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Products and Croda International
The main advantage of trading using opposite Air Products and Croda International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Croda International 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 Croda International will offset losses from the drop in Croda International's long position.Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
Croda International vs. PPG Industries | Croda International vs. Ecolab Inc | Croda International vs. Sherwin Williams Co | Croda International vs. Air Products and |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Transaction History View history of all your transactions and understand their impact on performance |