Correlation Between RPM International and Ashland Global
Can any of the company-specific risk be diversified away by investing in both RPM International and Ashland Global 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 RPM International and Ashland Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPM International and Ashland Global Holdings, you can compare the effects of market volatilities on RPM International and Ashland Global 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 RPM International with a short position of Ashland Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPM International and Ashland Global.
Diversification Opportunities for RPM International and Ashland Global
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RPM and Ashland is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding RPM International and Ashland Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashland Global Holdings and RPM International 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 RPM International are associated (or correlated) with Ashland Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashland Global Holdings has no effect on the direction of RPM International i.e., RPM International and Ashland Global go up and down completely randomly.
Pair Corralation between RPM International and Ashland Global
Considering the 90-day investment horizon RPM International is expected to generate 0.55 times more return on investment than Ashland Global. However, RPM International is 1.81 times less risky than Ashland Global. It trades about 0.25 of its potential returns per unit of risk. Ashland Global Holdings is currently generating about -0.16 per unit of risk. If you would invest 12,945 in RPM International on August 27, 2024 and sell it today you would earn a total of 842.00 from holding RPM International or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPM International vs. Ashland Global Holdings
Performance |
| Timeline |
| RPM International |
| Ashland Global Holdings |
RPM International and Ashland Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPM International and Ashland Global
The main advantage of trading using opposite RPM International and Ashland Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPM International position performs unexpectedly, Ashland Global 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 Ashland Global will offset losses from the drop in Ashland Global's long position.| RPM International vs. Oil Dri | RPM International vs. H B Fuller | RPM International vs. Northern Technologies | RPM International vs. Cabot |
| Ashland Global vs. H B Fuller | Ashland Global vs. Element Solutions | Ashland Global vs. Balchem | Ashland Global vs. Avantor |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |