Correlation Between PPG Industries and Iofina Plc
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Iofina Plc 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 PPG Industries and Iofina Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Iofina plc, you can compare the effects of market volatilities on PPG Industries and Iofina Plc 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 PPG Industries with a short position of Iofina Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Iofina Plc.
Diversification Opportunities for PPG Industries and Iofina Plc
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between PPG and Iofina is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc and PPG Industries 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 PPG Industries are associated (or correlated) with Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of PPG Industries i.e., PPG Industries and Iofina Plc go up and down completely randomly.
Pair Corralation between PPG Industries and Iofina Plc
Considering the 90-day investment horizon PPG Industries is expected to generate 0.45 times more return on investment than Iofina Plc. However, PPG Industries is 2.21 times less risky than Iofina Plc. It trades about -0.02 of its potential returns per unit of risk. Iofina plc is currently generating about -0.14 per unit of risk. If you would invest 12,481 in PPG Industries on September 12, 2024 and sell it today you would lose (222.00) from holding PPG Industries or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
PPG Industries vs. Iofina plc
Performance |
| Timeline |
| PPG Industries |
| Iofina plc |
PPG Industries and Iofina Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Iofina Plc
The main advantage of trading using opposite PPG Industries and Iofina Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Iofina Plc 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 Iofina Plc will offset losses from the drop in Iofina Plc's long position.| PPG Industries vs. LyondellBasell Industries NV | PPG Industries vs. International Flavors Fragrances | PPG Industries vs. Cabot | PPG Industries vs. Westlake Chemical |
| Iofina Plc vs. Green Star Products | Iofina Plc vs. Greystone Logistics | Iofina Plc vs. Crown Electrokinetics Corp | Iofina Plc vs. Orica 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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