Correlation Between Dupont De and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and PPG Industries, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and PPG Industries.
Diversification Opportunities for Dupont De and PPG Industries
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and PPG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and PPG Industries go up and down completely randomly.
Pair Corralation between Dupont De and PPG Industries
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.6 times more return on investment than PPG Industries. However, Dupont De is 1.6 times more volatile than PPG Industries. It trades about -0.05 of its potential returns per unit of risk. PPG Industries is currently generating about -0.1 per unit of risk. If you would invest 8,439 in Dupont De Nemours on August 24, 2024 and sell it today you would lose (164.00) from holding Dupont De Nemours or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. PPG Industries
Performance |
| Timeline |
| Dupont De Nemours |
| PPG Industries |
Dupont De and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and PPG Industries
The main advantage of trading using opposite Dupont De and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. LyondellBasell Industries NV | Dupont De vs. Air Products and |
| PPG Industries vs. Air Products and | PPG Industries vs. Linde plc Ordinary | PPG Industries vs. Ecolab Inc | PPG Industries vs. LyondellBasell Industries NV |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |