Correlation Between Aluminumof China and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and Procter Gamble 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 Aluminumof China and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Procter Gamble, you can compare the effects of market volatilities on Aluminumof China and Procter Gamble 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 Aluminumof China with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Procter Gamble.
Diversification Opportunities for Aluminumof China and Procter Gamble
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aluminumof and Procter is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Aluminumof China 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 Aluminum of are associated (or correlated) with Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Aluminumof China i.e., Aluminumof China and Procter Gamble go up and down completely randomly.
Pair Corralation between Aluminumof China and Procter Gamble
If you would invest 43.00 in Aluminum of on November 8, 2024 and sell it today you would earn a total of 22.00 from holding Aluminum of or generate 51.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Aluminum of vs. Procter Gamble
Performance |
| Timeline |
| Aluminumof China |
| Procter Gamble |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Aluminumof China and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Procter Gamble
The main advantage of trading using opposite Aluminumof China and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Aluminumof China vs. Air China Limited | Aluminumof China vs. COSCO SHIPPING Holdings | Aluminumof China vs. Zijin Mining Group | Aluminumof China vs. Bank of China |
| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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