Correlation Between Procter Gamble and Better World
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Better World 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 Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Better World Acquisition, you can compare the effects of market volatilities on Procter Gamble and Better World 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 Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Better World.
Diversification Opportunities for Procter Gamble and Better World
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Better is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition 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 Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of Procter Gamble i.e., Procter Gamble and Better World go up and down completely randomly.
Pair Corralation between Procter Gamble and Better World
If you would invest 16,409 in Procter Gamble on September 3, 2024 and sell it today you would earn a total of 1,517 from holding Procter Gamble or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Procter Gamble vs. Better World Acquisition
Performance |
| Timeline |
| Procter Gamble |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Procter Gamble and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Better World
The main advantage of trading using opposite Procter Gamble and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Procter Gamble vs. Highway Holdings Limited | Procter Gamble vs. QCR Holdings | Procter Gamble vs. Partner Communications | Procter Gamble vs. Acumen Pharmaceuticals |
| Better World vs. Biglari Holdings | Better World vs. Kura Sushi USA | Better World vs. Iridium Communications | Better World vs. First Watch Restaurant |
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.
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