Correlation Between PPG Industries and Oil Dri
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Oil Dri 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 Oil Dri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Oil Dri, you can compare the effects of market volatilities on PPG Industries and Oil Dri 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 Oil Dri. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Oil Dri.
Diversification Opportunities for PPG Industries and Oil Dri
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPG and Oil is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Oil Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Dri 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 Oil Dri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Dri has no effect on the direction of PPG Industries i.e., PPG Industries and Oil Dri go up and down completely randomly.
Pair Corralation between PPG Industries and Oil Dri
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Oil Dri. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 1.39 times less risky than Oil Dri. The stock trades about -0.03 of its potential returns per unit of risk. The Oil Dri is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,592 in Oil Dri on August 31, 2024 and sell it today you would earn a total of 320.00 from holding Oil Dri or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPG Industries vs. Oil Dri
Performance |
| Timeline |
| PPG Industries |
| Oil Dri |
PPG Industries and Oil Dri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Oil Dri
The main advantage of trading using opposite PPG Industries and Oil Dri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Oil Dri 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 Oil Dri will offset losses from the drop in Oil Dri's long position.| PPG Industries vs. Air Products and | PPG Industries vs. Linde plc Ordinary | PPG Industries vs. Ecolab Inc | PPG Industries vs. LyondellBasell Industries NV |
| Oil Dri vs. H B Fuller | Oil Dri vs. Minerals Technologies | Oil Dri vs. Quaker Chemical | Oil Dri vs. Sensient Technologies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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