Correlation Between Air Products and H B

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

Diversification Opportunities for Air Products and H B

0.2

Correlation Coefficient

Air Products  H B

Modest diversification

The 3 months correlation between Air and FUL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller 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 H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Air Products i.e., Air Products and H B go up and down completely randomly.

Pair Corralation between Air Products and H B

Considering the 90-day investment horizon Air Products and is expected to generate 1.07 times more return on investment than H B. However, Air Products is 1.07 times more volatile than H B Fuller. It trades about 0.03 of its potential returns per unit of risk. H B Fuller is currently generating about -0.01 per unit of risk. If you would invest  27,394  in Air Products and on November 20, 2024 and sell it today you would earn a total of  4,218  from holding Air Products and or generate 15.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Air Products and  vs.  H B Fuller

Air Products

Risk-Adjusted Performance

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 rather sound basic indicators, Air Products is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

H B Fuller

Risk-Adjusted Performance

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Air Products and H B

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

The idea behind Air Products and and H B Fuller 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.