Correlation Between IMCD NV and PPG Industries
Can any of the company-specific risk be diversified away by investing in both IMCD NV 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 IMCD NV and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMCD NV and PPG Industries, you can compare the effects of market volatilities on IMCD NV 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 IMCD NV with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMCD NV and PPG Industries.
Diversification Opportunities for IMCD NV and PPG Industries
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IMCD and PPG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding IMCD NV and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and IMCD NV 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 IMCD NV 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 IMCD NV i.e., IMCD NV and PPG Industries go up and down completely randomly.
Pair Corralation between IMCD NV and PPG Industries
Assuming the 90 days horizon IMCD NV is expected to under-perform the PPG Industries. In addition to that, IMCD NV is 1.29 times more volatile than PPG Industries. It trades about -0.08 of its total potential returns per unit of risk. PPG Industries is currently generating about 0.04 per unit of volatility. If you would invest 12,108 in PPG Industries on September 20, 2024 and sell it today you would earn a total of 98.00 from holding PPG Industries or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMCD NV vs. PPG Industries
Performance |
| Timeline |
| IMCD NV |
| PPG Industries |
IMCD NV and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMCD NV and PPG Industries
The main advantage of trading using opposite IMCD NV and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMCD NV 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.| IMCD NV vs. Air Products and | IMCD NV vs. PPG Industries | IMCD NV vs. Sherwin Williams Co | IMCD NV vs. Ecolab Inc |
| PPG Industries vs. LyondellBasell Industries NV | PPG Industries vs. Cabot | PPG Industries vs. Westlake Chemical | PPG Industries vs. Air Products and |
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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