Correlation Between AIR PRODCHEMICALS and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and HYDROFARM HLD 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 PRODCHEMICALS and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and HYDROFARM HLD GRP, you can compare the effects of market volatilities on AIR PRODCHEMICALS and HYDROFARM HLD 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 PRODCHEMICALS with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and HYDROFARM HLD.
Diversification Opportunities for AIR PRODCHEMICALS and HYDROFARM HLD
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AIR and HYDROFARM is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and AIR PRODCHEMICALS 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 PRODCHEMICALS are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and HYDROFARM HLD
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.37 times more return on investment than HYDROFARM HLD. However, AIR PRODCHEMICALS is 2.73 times less risky than HYDROFARM HLD. It trades about 0.17 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.04 per unit of risk. If you would invest 25,501 in AIR PRODCHEMICALS on September 15, 2024 and sell it today you would earn a total of 4,249 from holding AIR PRODCHEMICALS or generate 16.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AIR PRODCHEMICALS vs. HYDROFARM HLD GRP
Performance |
Timeline |
AIR PRODCHEMICALS |
HYDROFARM HLD GRP |
AIR PRODCHEMICALS and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AIR PRODCHEMICALS and HYDROFARM HLD
The main advantage of trading using opposite AIR PRODCHEMICALS and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.AIR PRODCHEMICALS vs. ScanSource | AIR PRODCHEMICALS vs. Tower One Wireless | AIR PRODCHEMICALS vs. NURAN WIRELESS INC | AIR PRODCHEMICALS vs. SCANSOURCE |
HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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