Correlation Between Essity AB and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Essity AB 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 Essity AB and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essity AB and Procter Gamble, you can compare the effects of market volatilities on Essity AB 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 Essity AB with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essity AB and Procter Gamble.
Diversification Opportunities for Essity AB and Procter Gamble
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Essity and Procter is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Essity AB and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Essity AB 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 Essity AB 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 Essity AB i.e., Essity AB and Procter Gamble go up and down completely randomly.
Pair Corralation between Essity AB and Procter Gamble
If you would invest 2,633 in Essity AB on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Essity AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Essity AB vs. Procter Gamble
Performance |
| Timeline |
| Essity AB |
| Procter Gamble |
Essity AB and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essity AB and Procter Gamble
The main advantage of trading using opposite Essity AB and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essity AB 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.| Essity AB vs. Hengan International Group | Essity AB vs. Henkel AG Co | Essity AB vs. LOral SA | Essity AB vs. Henkel Ag A |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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