Correlation Between INTER CARS and PPG Industries
Can any of the company-specific risk be diversified away by investing in both INTER CARS and PPG Industries 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 INTER CARS and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and PPG Industries, you can compare the effects of market volatilities on INTER CARS and PPG Industries 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 INTER CARS with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and PPG Industries.
Diversification Opportunities for INTER CARS and PPG Industries
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between INTER and PPG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and INTER CARS 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 INTER CARS SA are associated (or correlated) with PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of INTER CARS i.e., INTER CARS and PPG Industries go up and down completely randomly.
Pair Corralation between INTER CARS and PPG Industries
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.59 times more return on investment than PPG Industries. However, INTER CARS is 1.59 times more volatile than PPG Industries. It trades about 0.04 of its potential returns per unit of risk. PPG Industries is currently generating about 0.0 per unit of risk. If you would invest 8,991 in INTER CARS SA on October 9, 2024 and sell it today you would earn a total of 2,869 from holding INTER CARS SA or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. PPG Industries
Performance |
| Timeline |
| INTER CARS SA |
| PPG Industries |
INTER CARS and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and PPG Industries
The main advantage of trading using opposite INTER CARS and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| INTER CARS vs. PNC Financial Services | INTER CARS vs. SUN LIFE FINANCIAL | INTER CARS vs. De Grey Mining | INTER CARS vs. Yanzhou Coal Mining |
| PPG Industries vs. Cogent Communications Holdings | PPG Industries vs. EIDESVIK OFFSHORE NK | PPG Industries vs. Eidesvik Offshore ASA | PPG Industries vs. Singapore Telecommunications Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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