Correlation Between PPG Industries and Transgene
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Transgene 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 Transgene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Transgene SA, you can compare the effects of market volatilities on PPG Industries and Transgene 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 Transgene. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Transgene.
Diversification Opportunities for PPG Industries and Transgene
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PPG and Transgene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Transgene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transgene SA 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 Transgene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transgene SA has no effect on the direction of PPG Industries i.e., PPG Industries and Transgene go up and down completely randomly.
Pair Corralation between PPG Industries and Transgene
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Transgene. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 1.56 times less risky than Transgene. The stock trades about -0.05 of its potential returns per unit of risk. The Transgene SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 162.00 in Transgene SA on November 3, 2024 and sell it today you would lose (3.00) from holding Transgene SA or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPG Industries vs. Transgene SA
Performance |
| Timeline |
| PPG Industries |
| Transgene SA |
PPG Industries and Transgene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Transgene
The main advantage of trading using opposite PPG Industries and Transgene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Transgene 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 Transgene will offset losses from the drop in Transgene'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 |
| Transgene vs. The Hanover Insurance | Transgene vs. Commonwealth Bank of | Transgene vs. Nasdaq Inc | Transgene vs. Artisan Partners Asset |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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