Correlation Between IPC MEXICO and PPG Industries
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and PPG Industries, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and PPG Industries.
Diversification Opportunities for IPC MEXICO and PPG Industries
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPC and PPG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and PPG Industries go up and down completely randomly.
Pair Corralation between IPC MEXICO and PPG Industries
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the PPG Industries. In addition to that, IPC MEXICO is 6.17 times more volatile than PPG Industries. It trades about -0.11 of its total potential returns per unit of risk. PPG Industries is currently generating about 0.24 per unit of volatility. If you would invest 249,803 in PPG Industries on September 2, 2024 and sell it today you would earn a total of 1,397 from holding PPG Industries or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
IPC MEXICO vs. PPG Industries
Performance |
| Timeline |
IPC MEXICO and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
PPG Industries
Pair trading matchups for PPG Industries
Pair Trading with IPC MEXICO and PPG Industries
The main advantage of trading using opposite IPC MEXICO and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. Grupo Sports World | IPC MEXICO vs. Capital One Financial | IPC MEXICO vs. Prudential Financial | IPC MEXICO vs. FibraHotel |
| PPG Industries vs. Lloyds Banking Group | PPG Industries vs. UnitedHealth Group Incorporated | PPG Industries vs. Monster Beverage Corp | PPG Industries vs. Cognizant Technology Solutions |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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