Correlation Between Procter Gamble and General Cannabis
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and General Cannabis 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 General Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and General Cannabis Corp, you can compare the effects of market volatilities on Procter Gamble and General Cannabis 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 General Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and General Cannabis.
Diversification Opportunities for Procter Gamble and General Cannabis
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and General is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and General Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Cannabis Corp 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 General Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Cannabis Corp has no effect on the direction of Procter Gamble i.e., Procter Gamble and General Cannabis go up and down completely randomly.
Pair Corralation between Procter Gamble and General Cannabis
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.12 times more return on investment than General Cannabis. However, Procter Gamble is 8.25 times less risky than General Cannabis. It trades about 0.15 of its potential returns per unit of risk. General Cannabis Corp is currently generating about -0.1 per unit of risk. If you would invest 16,958 in Procter Gamble on August 24, 2024 and sell it today you would earn a total of 670.00 from holding Procter Gamble or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. General Cannabis Corp
Performance |
| Timeline |
| Procter Gamble |
| General Cannabis Corp |
Procter Gamble and General Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and General Cannabis
The main advantage of trading using opposite Procter Gamble and General Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, General Cannabis 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 General Cannabis will offset losses from the drop in General Cannabis' long position.| Procter Gamble vs. Eshallgo Class A | Procter Gamble vs. Amtech Systems | Procter Gamble vs. Gold Fields Ltd | Procter Gamble vs. Aegean Airlines SA |
| General Cannabis vs. Verano Holdings Corp | General Cannabis vs. 4Front Ventures Corp | General Cannabis vs. Ascend Wellness Holdings | General Cannabis vs. Medicine Man Technologies |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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