Correlation Between Clorox and PT Unilever
Can any of the company-specific risk be diversified away by investing in both Clorox and PT Unilever 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 Clorox and PT Unilever into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Clorox and PT Unilever Indonesia, you can compare the effects of market volatilities on Clorox and PT Unilever 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 Clorox with a short position of PT Unilever. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clorox and PT Unilever.
Diversification Opportunities for Clorox and PT Unilever
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clorox and UNLRF is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Clorox and PT Unilever Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Unilever Indonesia and Clorox 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 The Clorox are associated (or correlated) with PT Unilever. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Unilever Indonesia has no effect on the direction of Clorox i.e., Clorox and PT Unilever go up and down completely randomly.
Pair Corralation between Clorox and PT Unilever
Considering the 90-day investment horizon The Clorox is expected to generate 0.26 times more return on investment than PT Unilever. However, The Clorox is 3.78 times less risky than PT Unilever. It trades about 0.3 of its potential returns per unit of risk. PT Unilever Indonesia is currently generating about -0.3 per unit of risk. If you would invest 15,772 in The Clorox on August 29, 2024 and sell it today you would earn a total of 963.00 from holding The Clorox or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Clorox vs. PT Unilever Indonesia
Performance |
| Timeline |
| Clorox |
| PT Unilever Indonesia |
Clorox and PT Unilever Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clorox and PT Unilever
The main advantage of trading using opposite Clorox and PT Unilever positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clorox position performs unexpectedly, PT Unilever 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 PT Unilever will offset losses from the drop in PT Unilever's long position.| Clorox vs. Colgate Palmolive | Clorox vs. Procter Gamble | Clorox vs. Unilever PLC ADR | Clorox vs. Church Dwight |
| PT Unilever vs. LOreal Co ADR | PT Unilever vs. Unilever PLC ADR | PT Unilever vs. Kimberly Clark | PT Unilever vs. The Clorox |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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