Correlation Between Endocan Corp and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Endocan Corp 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 Endocan Corp and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endocan Corp and PPG Industries, you can compare the effects of market volatilities on Endocan Corp 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 Endocan Corp with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endocan Corp and PPG Industries.
Diversification Opportunities for Endocan Corp and PPG Industries
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Endocan and PPG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Endocan Corp and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and Endocan Corp 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 Endocan Corp 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 Endocan Corp i.e., Endocan Corp and PPG Industries go up and down completely randomly.
Pair Corralation between Endocan Corp and PPG Industries
Given the investment horizon of 90 days Endocan Corp is expected to generate 250.36 times more return on investment than PPG Industries. However, Endocan Corp is 250.36 times more volatile than PPG Industries. It trades about 0.27 of its potential returns per unit of risk. PPG Industries is currently generating about -0.04 per unit of risk. If you would invest 0.01 in Endocan Corp on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Endocan Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endocan Corp vs. PPG Industries
Performance |
| Timeline |
| Endocan Corp |
| PPG Industries |
Endocan Corp and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endocan Corp and PPG Industries
The main advantage of trading using opposite Endocan Corp and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endocan Corp 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.| Endocan Corp vs. Sherwin Williams Co | Endocan Corp vs. Air Liquide SA | Endocan Corp vs. Air Products and | Endocan Corp vs. Ecolab Inc |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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