Correlation Between Procter Gamble and Amerigo Resources
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Amerigo Resources 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 Amerigo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Amerigo Resources, you can compare the effects of market volatilities on Procter Gamble and Amerigo Resources 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 Amerigo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Amerigo Resources.
Diversification Opportunities for Procter Gamble and Amerigo Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Amerigo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Amerigo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerigo Resources 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 Amerigo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerigo Resources has no effect on the direction of Procter Gamble i.e., Procter Gamble and Amerigo Resources go up and down completely randomly.
Pair Corralation between Procter Gamble and Amerigo Resources
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.57 times more return on investment than Amerigo Resources. However, Procter Gamble is 1.76 times less risky than Amerigo Resources. It trades about 0.15 of its potential returns per unit of risk. Amerigo Resources is currently generating about -0.06 per unit of risk. If you would invest 16,962 in Procter Gamble on August 25, 2024 and sell it today you would earn a total of 666.00 from holding Procter Gamble or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Procter Gamble vs. Amerigo Resources
Performance |
| Timeline |
| Procter Gamble |
| Amerigo Resources |
Procter Gamble and Amerigo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Amerigo Resources
The main advantage of trading using opposite Procter Gamble and Amerigo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Amerigo Resources 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 Amerigo Resources will offset losses from the drop in Amerigo Resources' long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty |
| Amerigo Resources vs. First Quantum Minerals | Amerigo Resources vs. Antofagasta PLC | Amerigo Resources vs. Capstone Copper Corp | Amerigo Resources vs. Copper Mountain Mining |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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