Correlation Between First Ship and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Procter Gamble, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Procter Gamble.
Diversification Opportunities for First Ship and Procter Gamble
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Procter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and First Ship 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 First Ship Lease 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 First Ship i.e., First Ship and Procter Gamble go up and down completely randomly.
Pair Corralation between First Ship and Procter Gamble
Assuming the 90 days horizon First Ship Lease is expected to generate 4.01 times more return on investment than Procter Gamble. However, First Ship is 4.01 times more volatile than Procter Gamble. It trades about 0.06 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.11 per unit of risk. If you would invest 2.50 in First Ship Lease on September 3, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
First Ship Lease vs. Procter Gamble
Performance |
| Timeline |
| First Ship Lease |
| Procter Gamble |
First Ship and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Procter Gamble
The main advantage of trading using opposite First Ship and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.| First Ship vs. Broadstone Net Lease | First Ship vs. Global Ship Lease | First Ship vs. Flex | First Ship vs. Emerson Radio |
| Procter Gamble vs. Highway Holdings Limited | Procter Gamble vs. QCR Holdings | Procter Gamble vs. Partner Communications | Procter Gamble vs. Acumen Pharmaceuticals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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