Correlation Between PPG Industries and Dupont De

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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

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between PPG Industries and Dupont is 0.74. 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

Considering the 90-day investment horizon PPG Industries is expected to generate 1.05 times less return on investment than Dupont De. In addition to that, PPG Industries is 1.24 times more volatile than Dupont De Nemours. It trades about 0.31 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about 0.41 per unit of volatility. If you would invest  5,842  in Dupont De Nemours on September 2, 2022 and sell it today you would earn a total of  1,209  from holding Dupont De Nemours or generate 20.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

PPG Industries  vs.  Dupont De Nemours

 Performance (%) 
       Timeline  
PPG Industries 
PPG Industries Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in PPG Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, PPG Industries may actually be approaching a critical reversion point that can send shares even higher in January 2023.

PPG Industries Price Channel

Dupont De Nemours 
Dupont Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dupont Price Channel

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.
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The idea behind PPG Industries and Dupont De Nemours pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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