Correlation Between PPG Industries and Steel Dynamics
Can any of the company-specific risk be diversified away by investing in both PPG Industries and Steel Dynamics 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 Steel Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPG Industries and Steel Dynamics, you can compare the effects of market volatilities on PPG Industries and Steel Dynamics 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 Steel Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPG Industries and Steel Dynamics.
Diversification Opportunities for PPG Industries and Steel Dynamics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PPG and Steel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PPG Industries and Steel Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Dynamics 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 Steel Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Dynamics has no effect on the direction of PPG Industries i.e., PPG Industries and Steel Dynamics go up and down completely randomly.
Pair Corralation between PPG Industries and Steel Dynamics
Considering the 90-day investment horizon PPG Industries is expected to under-perform the Steel Dynamics. But the stock apears to be less risky and, when comparing its historical volatility, PPG Industries is 1.37 times less risky than Steel Dynamics. The stock trades about -0.09 of its potential returns per unit of risk. The Steel Dynamics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 13,406 in Steel Dynamics on September 6, 2025 and sell it today you would earn a total of 3,405 from holding Steel Dynamics or generate 25.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPG Industries vs. Steel Dynamics
Performance |
| Timeline |
| PPG Industries |
| Steel Dynamics |
PPG Industries and Steel Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPG Industries and Steel Dynamics
The main advantage of trading using opposite PPG Industries and Steel Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPG Industries position performs unexpectedly, Steel Dynamics 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 Steel Dynamics will offset losses from the drop in Steel Dynamics' long position.| PPG Industries vs. Motorcar Parts of | PPG Industries vs. United Microelectronics | PPG Industries vs. Renesas Electronics | PPG Industries vs. Shanghai Fudan Microelectronics |
| Steel Dynamics vs. Where Food Comes | Steel Dynamics vs. Smithfield Foods, Common | Steel Dynamics vs. Collins Foods Limited | Steel Dynamics vs. ConAgra Foods |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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