Correlation Between Procter Gamble and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Aim Investment 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 Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Aim Investment Secs, you can compare the effects of market volatilities on Procter Gamble and Aim Investment 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 Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Aim Investment.
Diversification Opportunities for Procter Gamble and Aim Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Aim is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Procter Gamble i.e., Procter Gamble and Aim Investment go up and down completely randomly.
Pair Corralation between Procter Gamble and Aim Investment
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 7.5 times more return on investment than Aim Investment. However, Procter Gamble is 7.5 times more volatile than Aim Investment Secs. It trades about 0.06 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.13 per unit of risk. If you would invest 17,350 in Procter Gamble on September 2, 2024 and sell it today you would earn a total of 576.00 from holding Procter Gamble or generate 3.32% 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. Aim Investment Secs
Performance |
| Timeline |
| Procter Gamble |
| Aim Investment Secs |
Procter Gamble and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Aim Investment
The main advantage of trading using opposite Procter Gamble and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment'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 |
| Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard 500 Index | Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard Total Stock |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |