Correlation Between PPG Industries and International Flavors
Can any of the company-specific risk be diversified away by investing in both PPG Industries and International Flavors 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 International Flavors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and International Flavors Fragrances, you can compare the effects of market volatilities on PPG Industries and International Flavors 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 International Flavors. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and International Flavors.
Diversification Opportunities for PPG Industries and International Flavors
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between PPG and International is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and International Flavors Fragranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Flavors 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 International Flavors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Flavors has no effect on the direction of PPG Industries i.e., PPG Industries and International Flavors go up and down completely randomly.
Pair Corralation between PPG Industries and International Flavors
Assuming the 90 days horizon PPG Industries is expected to generate 0.35 times more return on investment than International Flavors. However, PPG Industries is 2.89 times less risky than International Flavors. It trades about 0.02 of its potential returns per unit of risk. International Flavors Fragrances is currently generating about -0.11 per unit of risk. If you would invest 11,632 in PPG Industries on August 27, 2024 and sell it today you would earn a total of 28.00 from holding PPG Industries or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPG Industries vs. International Flavors Fragranc
Performance |
| Timeline |
| PPG Industries |
| International Flavors |
PPG Industries and International Flavors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and International Flavors
The main advantage of trading using opposite PPG Industries and International Flavors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, International Flavors 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 International Flavors will offset losses from the drop in International Flavors' long position.| PPG Industries vs. Broadwind | PPG Industries vs. Titan Machinery | PPG Industries vs. Gaztransport Technigaz SA | PPG Industries vs. DAIRY FARM INTL |
| International Flavors vs. PPG Industries | International Flavors vs. Albemarle | International Flavors vs. Superior Plus Corp | International Flavors vs. NMI Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |