Correlation Between RPM International and Pan American
Can any of the company-specific risk be diversified away by investing in both RPM International and Pan American 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 Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPM International and Pan American Silver, you can compare the effects of market volatilities on RPM International and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPM International and Pan American.
Diversification Opportunities for RPM International and Pan American
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RPM and Pan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding RPM International and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of RPM International i.e., RPM International and Pan American go up and down completely randomly.
Pair Corralation between RPM International and Pan American
Considering the 90-day investment horizon RPM International is expected to under-perform the Pan American. But the stock apears to be less risky and, when comparing its historical volatility, RPM International is 3.13 times less risky than Pan American. The stock trades about -0.12 of its potential returns per unit of risk. The Pan American Silver is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,988 in Pan American Silver on October 5, 2025 and sell it today you would earn a total of 1,116 from holding Pan American Silver or generate 27.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPM International vs. Pan American Silver
Performance |
| Timeline |
| RPM International |
| Pan American Silver |
RPM International and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPM International and Pan American
The main advantage of trading using opposite RPM International and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPM International position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| RPM International vs. Sociedad Quimica y | RPM International vs. LyondellBasell Industries NV | RPM International vs. Dupont De Nemours | RPM International vs. Reliance Steel Aluminum |
| Pan American vs. Alamos Gold | Pan American vs. James Hardie Industries | Pan American vs. Royal Gold | Pan American vs. RPM International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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