Correlation Between Hormel Foods and Air Products
Can any of the company-specific risk be diversified away by investing in both Hormel Foods 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 Hormel Foods and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and Air Products and, you can compare the effects of market volatilities on Hormel Foods 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 Hormel Foods with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Air Products.
Diversification Opportunities for Hormel Foods and Air Products
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hormel and Air is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Hormel Foods 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 Hormel Foods 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 Hormel Foods i.e., Hormel Foods and Air Products go up and down completely randomly.
Pair Corralation between Hormel Foods and Air Products
Assuming the 90 days trading horizon Hormel Foods is expected to under-perform the Air Products. In addition to that, Hormel Foods is 4.03 times more volatile than Air Products and. It trades about -0.14 of its total potential returns per unit of risk. Air Products and is currently generating about 0.06 per unit of volatility. If you would invest 44,670 in Air Products and on December 25, 2024 and sell it today you would earn a total of 722.00 from holding Air Products and or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Hormel Foods vs. Air Products and
Performance |
Timeline |
Hormel Foods |
Air Products |
Hormel Foods and Air Products Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hormel Foods and Air Products
The main advantage of trading using opposite Hormel Foods and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods 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.Hormel Foods vs. Micron Technology | Hormel Foods vs. PENN Entertainment, | Hormel Foods vs. Check Point Software | Hormel Foods vs. Waste Management |
Air Products vs. Zoom Video Communications | Air Products vs. MAHLE Metal Leve | Air Products vs. Public Storage | Air Products vs. T Mobile |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |