Correlation Between Air Products and Sherborne Investors

Can any of the company-specific risk be diversified away by investing in both Air Products and Sherborne Investors 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 Sherborne Investors 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 Sherborne Investors Guernsey, you can compare the effects of market volatilities on Air Products and Sherborne Investors 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 Sherborne Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Sherborne Investors.

Diversification Opportunities for Air Products and Sherborne Investors

0.37

Correlation Coefficient

Air Products  Sherborne Investors

Weak diversification

The 3 months correlation between Air and Sherborne is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Sherborne Investors Guernsey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherborne Investors 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 Sherborne Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherborne Investors has no effect on the direction of Air Products i.e., Air Products and Sherborne Investors go up and down completely randomly.

Pair Corralation between Air Products and Sherborne Investors

If you would invest (100.00) in Sherborne Investors Guernsey on October 6, 2024 and sell it today you would earn a total of  100.00  from holding Sherborne Investors Guernsey or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Air Products Chemicals  vs.  Sherborne Investors Guernsey

Air Products Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air Products Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Sherborne Investors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sherborne Investors Guernsey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sherborne Investors is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Air Products and Sherborne Investors

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

The idea behind Air Products Chemicals and Sherborne Investors Guernsey 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.