Correlation Between PPG Industries and Industrial Nanotech
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Industrial Nanotech 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 Industrial Nanotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Industrial Nanotech, you can compare the effects of market volatilities on PPG Industries and Industrial Nanotech 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 Industrial Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Industrial Nanotech.
Diversification Opportunities for PPG Industries and Industrial Nanotech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PPG and Industrial is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Industrial Nanotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Nanotech 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 Industrial Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Nanotech has no effect on the direction of PPG Industries i.e., PPG Industries and Industrial Nanotech go up and down completely randomly.
Pair Corralation between PPG Industries and Industrial Nanotech
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Industrial Nanotech. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 220.44 times less risky than Industrial Nanotech. The stock trades about -0.02 of its potential returns per unit of risk. The Industrial Nanotech is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Industrial Nanotech on September 16, 2024 and sell it today you would earn a total of 0.01 from holding Industrial Nanotech or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PPG Industries vs. Industrial Nanotech
Performance |
Timeline |
PPG Industries |
Industrial Nanotech |
PPG Industries and Industrial Nanotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PPG Industries and Industrial Nanotech
The main advantage of trading using opposite PPG Industries and Industrial Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Industrial Nanotech 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 Industrial Nanotech will offset losses from the drop in Industrial Nanotech's long position.PPG Industries vs. LyondellBasell Industries NV | PPG Industries vs. Cabot | PPG Industries vs. Westlake Chemical | PPG Industries vs. Air Products and |
Industrial Nanotech vs. Chemours Co | Industrial Nanotech vs. International Flavors Fragrances | Industrial Nanotech vs. Air Products and | Industrial Nanotech vs. PPG Industries |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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