Correlation Between Procter Gamble and JAR
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and JAR 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 JAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and JAR, you can compare the effects of market volatilities on Procter Gamble and JAR 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 JAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and JAR.
Diversification Opportunities for Procter Gamble and JAR
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and JAR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and JAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAR 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 JAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAR has no effect on the direction of Procter Gamble i.e., Procter Gamble and JAR go up and down completely randomly.
Pair Corralation between Procter Gamble and JAR
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 14.18 times less return on investment than JAR. But when comparing it to its historical volatility, Procter Gamble is 10.05 times less risky than JAR. It trades about 0.05 of its potential returns per unit of risk. JAR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.15 in JAR on August 27, 2024 and sell it today you would earn a total of 0.24 from holding JAR or generate 158.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.28% |
| Values | Daily Returns |
Procter Gamble vs. JAR
Performance |
| Timeline |
| Procter Gamble |
| JAR |
Procter Gamble and JAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and JAR
The main advantage of trading using opposite Procter Gamble and JAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, JAR 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 JAR will offset losses from the drop in JAR'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |