Correlation Between AGRICULTBK HADR/25 and PPG Industries
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and PPG Industries, you can compare the effects of market volatilities on AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and PPG Industries.
Diversification Opportunities for AGRICULTBK HADR/25 and PPG Industries
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGRICULTBK and PPG is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC 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 AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and PPG Industries go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and PPG Industries
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 1.73 times more return on investment than PPG Industries. However, AGRICULTBK HADR/25 is 1.73 times more volatile than PPG Industries. It trades about 0.07 of its potential returns per unit of risk. PPG Industries is currently generating about 0.0 per unit of risk. If you would invest 950.00 in AGRICULTBK HADR25 YC on September 1, 2024 and sell it today you would earn a total of 180.00 from holding AGRICULTBK HADR25 YC or generate 18.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. PPG Industries
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| PPG Industries |
AGRICULTBK HADR/25 and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and PPG Industries
The main advantage of trading using opposite AGRICULTBK HADR/25 and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 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.| AGRICULTBK HADR/25 vs. Scandinavian Tobacco Group | AGRICULTBK HADR/25 vs. British American Tobacco | AGRICULTBK HADR/25 vs. ITALIAN WINE BRANDS | AGRICULTBK HADR/25 vs. VIRGIN WINES UK |
| PPG Industries vs. Haier Smart Home | PPG Industries vs. Charter Communications | PPG Industries vs. HomeToGo SE | PPG Industries vs. GALENA MINING LTD |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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