Correlation Between Procter Gamble and Garcia Reguera
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Garcia Reguera 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 Procter Gamble and Garcia Reguera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble DRC and Garcia Reguera SA, you can compare the effects of market volatilities on Procter Gamble and Garcia Reguera 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 Procter Gamble with a short position of Garcia Reguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Garcia Reguera.
Diversification Opportunities for Procter Gamble and Garcia Reguera
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Procter and Garcia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble DRC and Garcia Reguera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garcia Reguera SA and Procter Gamble 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 Procter Gamble DRC are associated (or correlated) with Garcia Reguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garcia Reguera SA has no effect on the direction of Procter Gamble i.e., Procter Gamble and Garcia Reguera go up and down completely randomly.
Pair Corralation between Procter Gamble and Garcia Reguera
Assuming the 90 days horizon Procter Gamble DRC is expected to under-perform the Garcia Reguera. But the stock apears to be less risky and, when comparing its historical volatility, Procter Gamble DRC is 1.14 times less risky than Garcia Reguera. The stock trades about -0.2 of its potential returns per unit of risk. The Garcia Reguera SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 480,000 in Garcia Reguera SA on September 12, 2024 and sell it today you would lose (10,000) from holding Garcia Reguera SA or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble DRC vs. Garcia Reguera SA
Performance |
| Timeline |
| Procter Gamble DRC |
| Garcia Reguera SA |
Procter Gamble and Garcia Reguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Garcia Reguera
The main advantage of trading using opposite Procter Gamble and Garcia Reguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Garcia Reguera 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 Garcia Reguera will offset losses from the drop in Garcia Reguera's long position.| Procter Gamble vs. Agrometal SAI | Procter Gamble vs. Transportadora de Gas | Procter Gamble vs. Harmony Gold Mining | Procter Gamble vs. Compania de Transporte |
| Garcia Reguera vs. Harmony Gold Mining | Garcia Reguera vs. Compania de Transporte | Garcia Reguera vs. Transportadora de Gas | Garcia Reguera vs. Agrometal SAI |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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