Correlation Between Ecovyst and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Ecovyst 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 Ecovyst and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecovyst and PPG Industries, you can compare the effects of market volatilities on Ecovyst 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 Ecovyst with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecovyst and PPG Industries.
Diversification Opportunities for Ecovyst and PPG Industries
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecovyst and PPG is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ecovyst and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and Ecovyst 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 Ecovyst 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 Ecovyst i.e., Ecovyst and PPG Industries go up and down completely randomly.
Pair Corralation between Ecovyst and PPG Industries
Given the investment horizon of 90 days Ecovyst is expected to generate 3.7 times more return on investment than PPG Industries. However, Ecovyst is 3.7 times more volatile than PPG Industries. It trades about 0.33 of its potential returns per unit of risk. PPG Industries is currently generating about -0.1 per unit of risk. If you would invest 634.00 in Ecovyst on August 24, 2024 and sell it today you would earn a total of 178.00 from holding Ecovyst or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecovyst vs. PPG Industries
Performance |
| Timeline |
| Ecovyst |
| PPG Industries |
Ecovyst and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecovyst and PPG Industries
The main advantage of trading using opposite Ecovyst and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecovyst 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.| Ecovyst vs. Eastman Chemical | Ecovyst vs. Olin Corporation | Ecovyst vs. LyondellBasell Industries NV | Ecovyst 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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