Correlation Between Procter Gamble and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Burnham Holdings 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 Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Burnham Holdings, you can compare the effects of market volatilities on Procter Gamble and Burnham Holdings 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 Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Burnham Holdings.
Diversification Opportunities for Procter Gamble and Burnham Holdings
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Burnham is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Burnham Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings 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 Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings has no effect on the direction of Procter Gamble i.e., Procter Gamble and Burnham Holdings go up and down completely randomly.
Pair Corralation between Procter Gamble and Burnham Holdings
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 4.51 times less return on investment than Burnham Holdings. But when comparing it to its historical volatility, Procter Gamble is 2.35 times less risky than Burnham Holdings. It trades about 0.06 of its potential returns per unit of risk. Burnham Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,298 in Burnham Holdings on August 25, 2024 and sell it today you would earn a total of 141.00 from holding Burnham Holdings or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Burnham Holdings
Performance |
| Timeline |
| Procter Gamble |
| Burnham Holdings |
Procter Gamble and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Burnham Holdings
The main advantage of trading using opposite Procter Gamble and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Burnham Holdings 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 Burnham Holdings will offset losses from the drop in Burnham Holdings' long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Burnham Holdings vs. Travis Perkins PLC | Burnham Holdings vs. Armstrong World Industries | Burnham Holdings vs. Apogee Enterprises |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |