Correlation Between Capital Clean and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Capital Clean 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 Capital Clean and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Procter Gamble, you can compare the effects of market volatilities on Capital Clean 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 Capital Clean with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Procter Gamble.
Diversification Opportunities for Capital Clean and Procter Gamble
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Procter is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Capital Clean 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 Capital Clean Energy 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 Capital Clean i.e., Capital Clean and Procter Gamble go up and down completely randomly.
Pair Corralation between Capital Clean and Procter Gamble
Given the investment horizon of 90 days Capital Clean Energy is expected to generate 2.21 times more return on investment than Procter Gamble. However, Capital Clean is 2.21 times more volatile than Procter Gamble. It trades about 0.08 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.1 per unit of risk. If you would invest 1,307 in Capital Clean Energy on September 2, 2024 and sell it today you would earn a total of 523.00 from holding Capital Clean Energy or generate 40.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Procter Gamble
Performance |
| Timeline |
| Capital Clean Energy |
| Procter Gamble |
Capital Clean and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Procter Gamble
The main advantage of trading using opposite Capital Clean and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean 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.| Capital Clean vs. Link Real Estate | Capital Clean vs. CapitaLand Investment Limited | Capital Clean vs. American Eagle Outfitters | Capital Clean vs. Crombie Real Estate |
| Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Estee Lauder Companies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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