Correlation Between METISA Metalrgica and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica 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 METISA Metalrgica and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METISA Metalrgica Timboense and The Procter Gamble, you can compare the effects of market volatilities on METISA Metalrgica 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 METISA Metalrgica with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Procter Gamble.
Diversification Opportunities for METISA Metalrgica and Procter Gamble
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between METISA and Procter is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and METISA Metalrgica 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 METISA Metalrgica Timboense 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 METISA Metalrgica i.e., METISA Metalrgica and Procter Gamble go up and down completely randomly.
Pair Corralation between METISA Metalrgica and Procter Gamble
Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the Procter Gamble. In addition to that, METISA Metalrgica is 1.37 times more volatile than The Procter Gamble. It trades about -0.06 of its total potential returns per unit of risk. The Procter Gamble is currently generating about 0.1 per unit of volatility. If you would invest 6,250 in The Procter Gamble on September 2, 2024 and sell it today you would earn a total of 1,333 from holding The Procter Gamble or generate 21.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. The Procter Gamble
Performance |
| Timeline |
| METISA Metalrgica |
| Procter Gamble |
METISA Metalrgica and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and Procter Gamble
The main advantage of trading using opposite METISA Metalrgica and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica 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.| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi SA |
| Procter Gamble vs. United Rentals | Procter Gamble vs. Tyson Foods | Procter Gamble vs. salesforce inc | Procter Gamble vs. Beyond Meat |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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