Correlation Between Procter Gamble and IShares Core
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and iShares Core Total, you can compare the effects of market volatilities on Procter Gamble and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and IShares Core.
Diversification Opportunities for Procter Gamble and IShares Core
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Procter and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and iShares Core Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Total 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Total has no effect on the direction of Procter Gamble i.e., Procter Gamble and IShares Core go up and down completely randomly.
Pair Corralation between Procter Gamble and IShares Core
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 4.84 times more return on investment than IShares Core. However, Procter Gamble is 4.84 times more volatile than iShares Core Total. It trades about 0.06 of its potential returns per unit of risk. iShares Core Total is currently generating about 0.13 per unit of risk. If you would invest 16,497 in Procter Gamble on November 2, 2024 and sell it today you would earn a total of 244.00 from holding Procter Gamble or generate 1.48% 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. iShares Core Total
Performance |
| Timeline |
| Procter Gamble |
| iShares Core Total |
Procter Gamble and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and IShares Core
The main advantage of trading using opposite Procter Gamble and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies |
| IShares Core vs. iShares Core 1 5 | IShares Core vs. iShares Core International | IShares Core vs. iShares Treasury Bond | IShares Core vs. iShares 1 5 Year |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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