Correlation Between Procter Gamble and Columbus McKinnon
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Columbus McKinnon 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 Columbus McKinnon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Columbus McKinnon, you can compare the effects of market volatilities on Procter Gamble and Columbus McKinnon 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 Columbus McKinnon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Columbus McKinnon.
Diversification Opportunities for Procter Gamble and Columbus McKinnon
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Columbus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon 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 Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of Procter Gamble i.e., Procter Gamble and Columbus McKinnon go up and down completely randomly.
Pair Corralation between Procter Gamble and Columbus McKinnon
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 4.27 times less return on investment than Columbus McKinnon. But when comparing it to its historical volatility, Procter Gamble is 2.31 times less risky than Columbus McKinnon. It trades about 0.19 of its potential returns per unit of risk. Columbus McKinnon is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 3,283 in Columbus McKinnon on August 28, 2024 and sell it today you would earn a total of 716.00 from holding Columbus McKinnon or generate 21.81% 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. Columbus McKinnon
Performance |
| Timeline |
| Procter Gamble |
| Columbus McKinnon |
Procter Gamble and Columbus McKinnon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Columbus McKinnon
The main advantage of trading using opposite Procter Gamble and Columbus McKinnon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Columbus McKinnon 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 Columbus McKinnon will offset losses from the drop in Columbus McKinnon'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 |
| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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