Correlation Between Roebuck Food and Air Products
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Air Products Chemicals, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Air Products.
Diversification Opportunities for Roebuck Food and Air Products
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Roebuck and Air is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and Roebuck Food 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 Roebuck Food Group 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 Chemicals has no effect on the direction of Roebuck Food i.e., Roebuck Food and Air Products go up and down completely randomly.
Pair Corralation between Roebuck Food and Air Products
Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 0.49 times more return on investment than Air Products. However, Roebuck Food Group is 2.05 times less risky than Air Products. It trades about 0.13 of its potential returns per unit of risk. Air Products Chemicals is currently generating about -0.57 per unit of risk. If you would invest 1,680 in Roebuck Food Group on October 8, 2024 and sell it today you would earn a total of 20.00 from holding Roebuck Food Group or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Roebuck Food Group vs. Air Products Chemicals
Performance |
Timeline |
Roebuck Food Group |
Air Products Chemicals |
Roebuck Food and Air Products Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Roebuck Food and Air Products
The main advantage of trading using opposite Roebuck Food and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.Roebuck Food vs. Primorus Investments plc | Roebuck Food vs. FC Investment Trust | Roebuck Food vs. Allianz Technology Trust | Roebuck Food vs. Bellevue Healthcare Trust |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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