Correlation Between A Schulman and Air Products
Can any of the company-specific risk be diversified away by investing in both A Schulman 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 A Schulman and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Schulman and Air Products and, you can compare the effects of market volatilities on A Schulman 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 A Schulman with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of A Schulman and Air Products.
Diversification Opportunities for A Schulman and Air Products
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLMNP and Air is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding A Schulman and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and A Schulman 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 A Schulman 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 has no effect on the direction of A Schulman i.e., A Schulman and Air Products go up and down completely randomly.
Pair Corralation between A Schulman and Air Products
Assuming the 90 days horizon A Schulman is expected to generate 0.5 times more return on investment than Air Products. However, A Schulman is 1.99 times less risky than Air Products. It trades about 0.0 of its potential returns per unit of risk. Air Products and is currently generating about -0.02 per unit of risk. If you would invest 85,500 in A Schulman on January 24, 2024 and sell it today you would earn a total of 0.00 from holding A Schulman or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
A Schulman vs. Air Products and
Performance |
| Timeline |
| A Schulman |
| Air Products |
A Schulman and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A Schulman and Air Products
The main advantage of trading using opposite A Schulman and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A Schulman 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 A Schulman 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.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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