Correlation Between Procter Gamble and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Globex Mining 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 Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Globex Mining Enterprises, you can compare the effects of market volatilities on Procter Gamble and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Globex Mining.
Diversification Opportunities for Procter Gamble and Globex Mining
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Globex is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Procter Gamble i.e., Procter Gamble and Globex Mining go up and down completely randomly.
Pair Corralation between Procter Gamble and Globex Mining
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 2.37 times less return on investment than Globex Mining. But when comparing it to its historical volatility, Procter Gamble is 2.53 times less risky than Globex Mining. It trades about 0.05 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Globex Mining Enterprises on August 26, 2024 and sell it today you would earn a total of 20.00 from holding Globex Mining Enterprises or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Globex Mining Enterprises
Performance |
| Timeline |
| Procter Gamble |
| Globex Mining Enterprises |
Procter Gamble and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Globex Mining
The main advantage of trading using opposite Procter Gamble and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining'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 |
| Globex Mining vs. Ascendant Resources | Globex Mining vs. Cantex Mine Development | Globex Mining vs. Amarc Resources | Globex Mining vs. Sterling Metals Corp |
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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