Correlation Between Procter Gamble and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and CytomX Therapeutics 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 CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and CytomX Therapeutics, you can compare the effects of market volatilities on Procter Gamble and CytomX Therapeutics 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 CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and CytomX Therapeutics.
Diversification Opportunities for Procter Gamble and CytomX Therapeutics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procter and CytomX is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics 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 CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Procter Gamble i.e., Procter Gamble and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Procter Gamble and CytomX Therapeutics
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.31 times more return on investment than CytomX Therapeutics. However, Procter Gamble is 3.19 times less risky than CytomX Therapeutics. It trades about 0.17 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 16,930 in Procter Gamble on August 27, 2024 and sell it today you would earn a total of 698.00 from holding Procter Gamble or generate 4.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Procter Gamble vs. CytomX Therapeutics
Performance |
Timeline |
Procter Gamble |
CytomX Therapeutics |
Procter Gamble and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and CytomX Therapeutics
The main advantage of trading using opposite Procter Gamble and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, CytomX Therapeutics 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
CytomX Therapeutics vs. Eliem Therapeutics | CytomX Therapeutics vs. HCW Biologics | CytomX Therapeutics vs. Scpharmaceuticals | CytomX Therapeutics vs. Milestone Pharmaceuticals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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