Correlation Between Capex SA and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Capex SA 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 Capex SA and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and Procter Gamble DRC, you can compare the effects of market volatilities on Capex SA 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 Capex SA with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Procter Gamble.
Diversification Opportunities for Capex SA and Procter Gamble
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capex and Procter is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Procter Gamble DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble DRC and Capex SA 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 Capex SA 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 DRC has no effect on the direction of Capex SA i.e., Capex SA and Procter Gamble go up and down completely randomly.
Pair Corralation between Capex SA and Procter Gamble
Assuming the 90 days trading horizon Capex SA is expected to generate 2.54 times more return on investment than Procter Gamble. However, Capex SA is 2.54 times more volatile than Procter Gamble DRC. It trades about 0.43 of its potential returns per unit of risk. Procter Gamble DRC is currently generating about 0.07 per unit of risk. If you would invest 623,000 in Capex SA on August 31, 2024 and sell it today you would earn a total of 252,000 from holding Capex SA or generate 40.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. Procter Gamble DRC
Performance |
| Timeline |
| Capex SA |
| Procter Gamble DRC |
Capex SA and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and Procter Gamble
The main advantage of trading using opposite Capex SA and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA 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.| Capex SA vs. Transportadora de Gas | Capex SA vs. Harmony Gold Mining | Capex SA vs. Compania de Transporte | Capex SA vs. Agrometal SAI |
| Procter Gamble vs. Transportadora de Gas | Procter Gamble vs. Telecom Argentina | Procter Gamble vs. Compania de Transporte | Procter Gamble vs. Harmony Gold Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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