Correlation Between Rogers and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Rogers and PPG Industries 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 Rogers and PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers and PPG Industries, you can compare the effects of market volatilities on Rogers and PPG Industries 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 Rogers with a short position of PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers and PPG Industries.
Diversification Opportunities for Rogers and PPG Industries
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rogers and PPG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Rogers and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries and Rogers 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 Rogers are associated (or correlated) with PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Rogers i.e., Rogers and PPG Industries go up and down completely randomly.
Pair Corralation between Rogers and PPG Industries
Considering the 90-day investment horizon Rogers is expected to under-perform the PPG Industries. But the stock apears to be less risky and, when comparing its historical volatility, Rogers is 1.05 times less risky than PPG Industries. The stock trades about -0.17 of its potential returns per unit of risk. The PPG Industries is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,542 in PPG Industries on November 3, 2024 and sell it today you would lose (4.00) from holding PPG Industries or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers vs. PPG Industries
Performance |
| Timeline |
| Rogers |
| PPG Industries |
Rogers and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers and PPG Industries
The main advantage of trading using opposite Rogers and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| Rogers vs. Pearson PLC ADR | Rogers vs. Zane Interactive Publishing | Rogers vs. Western Acquisition Ventures | Rogers vs. 51Talk Online Education |
| PPG Industries vs. Air Products and | PPG Industries vs. Linde plc Ordinary | PPG Industries vs. Ecolab Inc | PPG Industries vs. LyondellBasell Industries NV |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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