Correlation Between PPG Industries and Chemours

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

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

Diversification Opportunities for PPG Industries and Chemours

0.4

Correlation Coefficient

PPG Industries  Chemours

Very weak diversification

The 3 months correlation between PPG and Chemours is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and The Chemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and PPG Industries 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 PPG Industries are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of PPG Industries i.e., PPG Industries and Chemours go up and down completely randomly.

Pair Corralation between PPG Industries and Chemours

If you would invest  40,890  in The Chemours on October 12, 2024 and sell it today you would earn a total of  0.00  from holding The Chemours or generate 0.0% return on investment over 90 days.

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

PPG Industries  vs.  The Chemours

PPG Industries

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PPG Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, PPG Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chemours

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Chemours are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PPG Industries and Chemours

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

The idea behind PPG Industries and The Chemours 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.