Correlation Between Procter Gamble and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Dimensional ETF 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 Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Dimensional ETF Trust, you can compare the effects of market volatilities on Procter Gamble and Dimensional ETF 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 Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Dimensional ETF.
Diversification Opportunities for Procter Gamble and Dimensional ETF
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Procter and Dimensional is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of Procter Gamble i.e., Procter Gamble and Dimensional ETF go up and down completely randomly.
Pair Corralation between Procter Gamble and Dimensional ETF
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.27 times more return on investment than Dimensional ETF. However, Procter Gamble is 3.27 times more volatile than Dimensional ETF Trust. It trades about 0.07 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about -0.14 per unit of risk. If you would invest 16,970 in Procter Gamble on August 23, 2024 and sell it today you would earn a total of 292.00 from holding Procter Gamble or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Dimensional ETF Trust
Performance |
| Timeline |
| Procter Gamble |
| Dimensional ETF Trust |
Procter Gamble and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Dimensional ETF
The main advantage of trading using opposite Procter Gamble and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Colgate Palmolive |
| Dimensional ETF vs. Hartford Short Duration | Dimensional ETF vs. American Century Diversified | Dimensional ETF vs. First Trust Short | Dimensional ETF vs. HUMANA INC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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