Correlation Between Procter Gamble and Condor Petroleum
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Condor Petroleum 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 Condor Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Condor Petroleum, you can compare the effects of market volatilities on Procter Gamble and Condor Petroleum 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 Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Condor Petroleum.
Diversification Opportunities for Procter Gamble and Condor Petroleum
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and Condor is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum 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 Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of Procter Gamble i.e., Procter Gamble and Condor Petroleum go up and down completely randomly.
Pair Corralation between Procter Gamble and Condor Petroleum
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.26 times more return on investment than Condor Petroleum. However, Procter Gamble is 3.88 times less risky than Condor Petroleum. It trades about 0.35 of its potential returns per unit of risk. Condor Petroleum is currently generating about -0.12 per unit of risk. If you would invest 16,518 in Procter Gamble on September 1, 2024 and sell it today you would earn a total of 1,408 from holding Procter Gamble or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Procter Gamble vs. Condor Petroleum
Performance |
| Timeline |
| Procter Gamble |
| Condor Petroleum |
Procter Gamble and Condor Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Condor Petroleum
The main advantage of trading using opposite Procter Gamble and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Condor Petroleum 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 Condor Petroleum will offset losses from the drop in Condor Petroleum's long position.| Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Estee Lauder Companies |
| Condor Petroleum vs. Petroleo Brasileiro Petrobras | Condor Petroleum vs. Equinor ASA ADR | Condor Petroleum vs. Eni SpA ADR | Condor Petroleum vs. YPF Sociedad Anonima |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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