Correlation Between PPG Industries and Dupont De
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Dupont De 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 Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Dupont De Nemours, you can compare the effects of market volatilities on PPG Industries and Dupont De 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 Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Dupont De.
Diversification Opportunities for PPG Industries and Dupont De
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PPG and Dupont is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours 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 Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of PPG Industries i.e., PPG Industries and Dupont De go up and down completely randomly.
Pair Corralation between PPG Industries and Dupont De
Assuming the 90 days horizon PPG Industries is expected to generate 1.05 times more return on investment than Dupont De. However, PPG Industries is 1.05 times more volatile than Dupont De Nemours. It trades about -0.14 of its potential returns per unit of risk. Dupont De Nemours is currently generating about -0.26 per unit of risk. If you would invest 11,880 in PPG Industries on September 25, 2024 and sell it today you would lose (475.00) from holding PPG Industries or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPG Industries vs. Dupont De Nemours
Performance |
| Timeline |
| PPG Industries |
| Dupont De Nemours |
PPG Industries and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Dupont De
The main advantage of trading using opposite PPG Industries and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De's long position.| PPG Industries vs. Linde PLC | PPG Industries vs. Air Liquide SA | PPG Industries vs. The Sherwin Williams | PPG Industries vs. Ecolab Inc |
| Dupont De vs. Linde PLC | Dupont De vs. Air Liquide SA | Dupont De vs. The Sherwin Williams | Dupont De vs. Ecolab Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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