Correlation Between Air Products and Harley Davidson
Can any of the company-specific risk be diversified away by investing in both Air Products and Harley Davidson 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 Harley Davidson 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 Harley Davidson, you can compare the effects of market volatilities on Air Products and Harley Davidson 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 Harley Davidson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Harley Davidson.
Diversification Opportunities for Air Products and Harley Davidson
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Harley is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Harley Davidson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harley Davidson 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 Harley Davidson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harley Davidson has no effect on the direction of Air Products i.e., Air Products and Harley Davidson go up and down completely randomly.
Pair Corralation between Air Products and Harley Davidson
Considering the 90-day investment horizon Air Products and is expected to generate 0.71 times more return on investment than Harley Davidson. However, Air Products and is 1.4 times less risky than Harley Davidson. It trades about -0.15 of its potential returns per unit of risk. Harley Davidson is currently generating about -0.15 per unit of risk. If you would invest 30,486 in Air Products and on October 7, 2024 and sell it today you would lose (2,095) from holding Air Products and or give up 6.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Products and vs. Harley Davidson
Performance |
Timeline |
Air Products |
Harley Davidson |
Air Products and Harley Davidson Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Products and Harley Davidson
The main advantage of trading using opposite Air Products and Harley Davidson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Harley Davidson 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 Harley Davidson will offset losses from the drop in Harley Davidson's long position.Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
Harley Davidson vs. International Consolidated Airlines | Harley Davidson vs. Frontier Group Holdings | Harley Davidson vs. JetBlue Airways Corp | Harley Davidson vs. Capital Clean Energy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |