Correlation Between James Hardie and PPC
Can any of the company-specific risk be diversified away by investing in both James Hardie and PPC 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 James Hardie and PPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Hardie Industries and PPC Ltd ADR, you can compare the effects of market volatilities on James Hardie and PPC 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 James Hardie with a short position of PPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Hardie and PPC.
Diversification Opportunities for James Hardie and PPC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between James and PPC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding James Hardie Industries and PPC Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPC Ltd ADR and James Hardie 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 James Hardie Industries are associated (or correlated) with PPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPC Ltd ADR has no effect on the direction of James Hardie i.e., James Hardie and PPC go up and down completely randomly.
Pair Corralation between James Hardie and PPC
Considering the 90-day investment horizon James Hardie Industries is expected to generate 0.52 times more return on investment than PPC. However, James Hardie Industries is 1.92 times less risky than PPC. It trades about -0.01 of its potential returns per unit of risk. PPC Ltd ADR is currently generating about -0.03 per unit of risk. If you would invest 3,855 in James Hardie Industries on November 3, 2024 and sell it today you would lose (469.00) from holding James Hardie Industries or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 43.15% |
| Values | Daily Returns |
James Hardie Industries vs. PPC Ltd ADR
Performance |
| Timeline |
| James Hardie Industries |
| PPC Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
James Hardie and PPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Hardie and PPC
The main advantage of trading using opposite James Hardie and PPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Hardie position performs unexpectedly, PPC 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 PPC will offset losses from the drop in PPC's long position.| James Hardie vs. Loma Negra Compania | James Hardie vs. Summit Materials | James Hardie vs. United States Lime | James Hardie vs. Eagle Materials |
| PPC vs. Wienerberger Baustoffindustrie | PPC vs. China National Building | PPC vs. Anhui Conch Cement | PPC vs. Lafargeholcim Ltd ADR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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