Correlation Between Air Products and Ecolab
Can any of the company-specific risk be diversified away by investing in both Air Products and Ecolab 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 Ecolab 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 Ecolab Inc, you can compare the effects of market volatilities on Air Products and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Ecolab.
Diversification Opportunities for Air Products and Ecolab
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Ecolab is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Air Products i.e., Air Products and Ecolab go up and down completely randomly.
Pair Corralation between Air Products and Ecolab
Considering the 90-day investment horizon Air Products and is expected to generate 1.04 times more return on investment than Ecolab. However, Air Products is 1.04 times more volatile than Ecolab Inc. It trades about 0.08 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.04 per unit of risk. If you would invest 27,800 in Air Products and on June 6, 2025 and sell it today you would earn a total of 1,328 from holding Air Products and or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Ecolab Inc
Performance |
| Timeline |
| Air Products |
| Ecolab Inc |
Air Products and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Ecolab
The main advantage of trading using opposite Air Products and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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