Correlation Between PPG Industries and Graphene Manufacturing
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Graphene Manufacturing 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 Graphene Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Graphene Manufacturing Group, you can compare the effects of market volatilities on PPG Industries and Graphene Manufacturing 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 Graphene Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Graphene Manufacturing.
Diversification Opportunities for PPG Industries and Graphene Manufacturing
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PPG and Graphene is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Graphene Manufacturing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphene Manufacturing 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 Graphene Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphene Manufacturing has no effect on the direction of PPG Industries i.e., PPG Industries and Graphene Manufacturing go up and down completely randomly.
Pair Corralation between PPG Industries and Graphene Manufacturing
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Graphene Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 4.31 times less risky than Graphene Manufacturing. The stock trades about -0.03 of its potential returns per unit of risk. The Graphene Manufacturing Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Graphene Manufacturing Group on December 2, 2024 and sell it today you would lose (42.00) from holding Graphene Manufacturing Group or give up 39.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PPG Industries vs. Graphene Manufacturing Group
Performance |
Timeline |
PPG Industries |
Graphene Manufacturing |
PPG Industries and Graphene Manufacturing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PPG Industries and Graphene Manufacturing
The main advantage of trading using opposite PPG Industries and Graphene Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Graphene Manufacturing 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 Graphene Manufacturing will offset losses from the drop in Graphene Manufacturing's long position.PPG Industries vs. Air Products and | PPG Industries vs. Linde plc Ordinary | PPG Industries vs. Ecolab Inc | PPG Industries vs. LyondellBasell Industries NV |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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