Correlation Between Air Products and Symrise Ag

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

Diversification Opportunities for Air Products and Symrise Ag

0.18

Correlation Coefficient

Air Products  Symrise Ag

Average diversification

The 3 months correlation between Air and Symrise is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Symrise Ag PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symrise Ag PK 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 Symrise Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symrise Ag PK has no effect on the direction of Air Products i.e., Air Products and Symrise Ag go up and down completely randomly.

Pair Corralation between Air Products and Symrise Ag

Considering the 90-day investment horizon Air Products and is expected to generate 1.02 times more return on investment than Symrise Ag. However, Air Products is 1.02 times more volatile than Symrise Ag PK. It trades about -0.07 of its potential returns per unit of risk. Symrise Ag PK is currently generating about -0.11 per unit of risk. If you would invest  33,229  in Air Products and on November 29, 2024 and sell it today you would lose (1,988) from holding Air Products and or give up 5.98% of portfolio value over 90 days.

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

Air Products and  vs.  Symrise Ag PK

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.

Symrise Ag PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Symrise Ag PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Air Products and Symrise Ag

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

The idea behind Air Products and and Symrise Ag PK 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.