Correlation Between PPG Industries and Symrise AG
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Symrise AG 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 Symrise AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Symrise AG, you can compare the effects of market volatilities on PPG Industries and Symrise AG 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 Symrise AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Symrise AG.
Diversification Opportunities for PPG Industries and Symrise AG
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PPG and Symrise is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Symrise AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symrise AG 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 Symrise AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symrise AG has no effect on the direction of PPG Industries i.e., PPG Industries and Symrise AG go up and down completely randomly.
Pair Corralation between PPG Industries and Symrise AG
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Symrise AG. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 1.56 times less risky than Symrise AG. The stock trades about -0.01 of its potential returns per unit of risk. The Symrise AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9,711 in Symrise AG on September 1, 2024 and sell it today you would earn a total of 1,354 from holding Symrise AG or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.98% |
| Values | Daily Returns |
PPG Industries vs. Symrise AG
Performance |
| Timeline |
| PPG Industries |
| Symrise AG |
PPG Industries and Symrise AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Symrise AG
The main advantage of trading using opposite PPG Industries and Symrise AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Symrise AG 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 Symrise AG will offset losses from the drop in Symrise AG'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 |
| Symrise AG vs. Givaudan SA | Symrise AG vs. Olin Corporation | Symrise AG vs. International Flavors Fragrances | Symrise AG vs. Sika AG |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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