Correlation Between Gold Road and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Gold Road 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 Gold Road and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and PPG Industries, you can compare the effects of market volatilities on Gold Road 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 Gold Road with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and PPG Industries.
Diversification Opportunities for Gold Road and PPG Industries
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gold and PPG is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and PPG Industries go up and down completely randomly.
Pair Corralation between Gold Road and PPG Industries
Assuming the 90 days horizon Gold Road Resources is expected to generate 2.05 times more return on investment than PPG Industries. However, Gold Road is 2.05 times more volatile than PPG Industries. It trades about 0.02 of its potential returns per unit of risk. PPG Industries is currently generating about 0.0 per unit of risk. If you would invest 113.00 in Gold Road Resources on October 7, 2024 and sell it today you would earn a total of 12.00 from holding Gold Road Resources or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. PPG Industries
Performance |
| Timeline |
| Gold Road Resources |
| PPG Industries |
Gold Road and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and PPG Industries
The main advantage of trading using opposite Gold Road and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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.| Gold Road vs. Wheaton Precious Metals | Gold Road vs. Superior Plus Corp | Gold Road vs. NMI Holdings | Gold Road vs. SIVERS SEMICONDUCTORS AB |
| PPG Industries vs. CarsalesCom | PPG Industries vs. Inspire Medical Systems | PPG Industries vs. MeVis Medical Solutions | PPG Industries vs. INTER CARS SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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