Correlation Between Kirin Holdings and AIR PRODCHEMICALS

Can any of the company-specific risk be diversified away by investing in both Kirin Holdings and AIR PRODCHEMICALS 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 Kirin Holdings and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kirin Holdings and AIR PRODCHEMICALS, you can compare the effects of market volatilities on Kirin Holdings and AIR PRODCHEMICALS 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 Kirin Holdings with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirin Holdings and AIR PRODCHEMICALS.

Diversification Opportunities for Kirin Holdings and AIR PRODCHEMICALS

-0.63

Correlation Coefficient

Kirin Holdings  AIR PRODCHEMICALS

Excellent diversification

The 3 months correlation between Kirin and AIR is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kirin Holdings and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and Kirin Holdings 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 Kirin Holdings are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Kirin Holdings i.e., Kirin Holdings and AIR PRODCHEMICALS go up and down completely randomly.

Pair Corralation between Kirin Holdings and AIR PRODCHEMICALS

Assuming the 90 days horizon Kirin Holdings is expected to under-perform the AIR PRODCHEMICALS. But the stock apears to be less risky and, when comparing its historical volatility, Kirin Holdings is 1.03 times less risky than AIR PRODCHEMICALS. The stock trades about -0.04 of its potential returns per unit of risk. The AIR PRODCHEMICALS is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  24,656  in AIR PRODCHEMICALS on September 5, 2024 and sell it today you would earn a total of  7,294  from holding AIR PRODCHEMICALS or generate 29.58% return on investment over 90 days.

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

Kirin Holdings  vs.  AIR PRODCHEMICALS

Kirin Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kirin Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kirin Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AIR PRODCHEMICALS

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AIR PRODCHEMICALS are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AIR PRODCHEMICALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kirin Holdings and AIR PRODCHEMICALS

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

The idea behind Kirin Holdings and AIR PRODCHEMICALS 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.