Correlation Between Procter Gamble and Batu Kawan
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Batu Kawan 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 Batu Kawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Batu Kawan Bhd, you can compare the effects of market volatilities on Procter Gamble and Batu Kawan 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 Batu Kawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Batu Kawan.
Diversification Opportunities for Procter Gamble and Batu Kawan
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Batu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Batu Kawan Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batu Kawan Bhd 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 are associated (or correlated) with Batu Kawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batu Kawan Bhd has no effect on the direction of Procter Gamble i.e., Procter Gamble and Batu Kawan go up and down completely randomly.
Pair Corralation between Procter Gamble and Batu Kawan
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 2.01 times more return on investment than Batu Kawan. However, Procter Gamble is 2.01 times more volatile than Batu Kawan Bhd. It trades about 0.17 of its potential returns per unit of risk. Batu Kawan Bhd is currently generating about 0.07 per unit of risk. If you would invest 16,930 in Procter Gamble on August 27, 2024 and sell it today you would earn a total of 698.00 from holding Procter Gamble or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Procter Gamble vs. Batu Kawan Bhd
Performance |
| Timeline |
| Procter Gamble |
| Batu Kawan Bhd |
Procter Gamble and Batu Kawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Batu Kawan
The main advantage of trading using opposite Procter Gamble and Batu Kawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Batu Kawan 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 Batu Kawan will offset losses from the drop in Batu Kawan's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Batu Kawan vs. Nova Wellness Group | Batu Kawan vs. Leader Steel Holdings | Batu Kawan vs. Kluang Rubber | Batu Kawan vs. Dataprep Holdings Bhd |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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