Correlation Between AirBoss Of and Neo Performance

Can any of the company-specific risk be diversified away by investing in both AirBoss Of and Neo Performance 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 AirBoss Of and Neo Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AirBoss of America and Neo Performance Materials, you can compare the effects of market volatilities on AirBoss Of and Neo Performance 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 AirBoss Of with a short position of Neo Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirBoss Of and Neo Performance.

Diversification Opportunities for AirBoss Of and Neo Performance

0.58

Correlation Coefficient

AirBoss Of  Neo Performance

Very weak diversification

The 3 months correlation between AirBoss and Neo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AirBoss of America and Neo Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Performance Materials and AirBoss Of 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 AirBoss of America are associated (or correlated) with Neo Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Performance Materials has no effect on the direction of AirBoss Of i.e., AirBoss Of and Neo Performance go up and down completely randomly.

Pair Corralation between AirBoss Of and Neo Performance

Assuming the 90 days trading horizon AirBoss Of is expected to generate 1.91 times less return on investment than Neo Performance. In addition to that, AirBoss Of is 1.02 times more volatile than Neo Performance Materials. It trades about 0.15 of its total potential returns per unit of risk. Neo Performance Materials is currently generating about 0.28 per unit of volatility. If you would invest  1,005  in Neo Performance Materials on April 22, 2025 and sell it today you would earn a total of  649.00  from holding Neo Performance Materials or generate 64.58% return on investment over 90 days.

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

AirBoss of America  vs.  Neo Performance Materials

AirBoss of America

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AirBoss of America are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AirBoss Of displayed solid returns over the last few months and may actually be approaching a breakup point.

Neo Performance Materials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Performance Materials are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Neo Performance displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AirBoss Of and Neo Performance

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

The idea behind AirBoss of America and Neo Performance Materials 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.