Correlation Between Gol Intelligent and Air Products

Can any of the company-specific risk be diversified away by investing in both Gol Intelligent and Air Products 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 Gol Intelligent and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gol Intelligent Airlines and Air Products and, you can compare the effects of market volatilities on Gol Intelligent and Air Products 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 Gol Intelligent with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and Air Products.

Diversification Opportunities for Gol Intelligent and Air Products

0.0

Correlation Coefficient

Gol Intelligent  Air Products

Pay attention - limited upside

The 3 months correlation between Gol and Air is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gol Intelligent Airlines and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Gol Intelligent 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 Gol Intelligent Airlines are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Gol Intelligent i.e., Gol Intelligent and Air Products go up and down completely randomly.

Pair Corralation between Gol Intelligent and Air Products

If you would invest  23,356  in Air Products and on October 4, 2024 and sell it today you would earn a total of  4,457  from holding Air Products and or generate 19.08% return on investment over 90 days.

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

Gol Intelligent Airlines  vs.  Air Products and

Gol Intelligent Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Air Products

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Products and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Air Products may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gol Intelligent and Air Products

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

The idea behind Gol Intelligent Airlines and Air Products and 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.