Correlation Between Danimer Scientific and Air Products

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Can any of the company-specific risk be diversified away by investing in both Danimer Scientific 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 Danimer Scientific and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danimer Scientific and Air Products And, you can compare the effects of market volatilities on Danimer Scientific 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 Danimer Scientific with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danimer Scientific and Air Products.

Diversification Opportunities for Danimer Scientific and Air Products

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Danimer and Air is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and Air Products And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products And and Danimer Scientific 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 Danimer Scientific 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 And has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and Air Products go up and down completely randomly.

Pair Corralation between Danimer Scientific and Air Products

Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the Air Products. In addition to that, Danimer Scientific is 3.67 times more volatile than Air Products And. It trades about -0.02 of its total potential returns per unit of risk. Air Products And is currently generating about 0.01 per unit of volatility. If you would invest  23,916  in Air Products And on December 30, 2023 and sell it today you would earn a total of  311.00  from holding Air Products And or generate 1.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Danimer Scientific  vs.  Air Products And

 Performance 
       Timeline  
Danimer Scientific 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Danimer Scientific are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Danimer Scientific reported solid returns over the last few months and may actually be approaching a breakup point.
Air Products And 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Air Products And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Danimer Scientific and Air Products Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Danimer Scientific and Air Products

The main advantage of trading using opposite Danimer Scientific and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danimer Scientific 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.
The idea behind Danimer Scientific and Air Products And 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.
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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