Correlation Between Procter Gamble and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Kontoor Brands 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 Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Kontoor Brands, you can compare the effects of market volatilities on Procter Gamble and Kontoor Brands 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 Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Kontoor Brands.
Diversification Opportunities for Procter Gamble and Kontoor Brands
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Procter and Kontoor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands 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 Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Procter Gamble i.e., Procter Gamble and Kontoor Brands go up and down completely randomly.
Pair Corralation between Procter Gamble and Kontoor Brands
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.47 times more return on investment than Kontoor Brands. However, Procter Gamble is 2.13 times less risky than Kontoor Brands. It trades about 0.06 of its potential returns per unit of risk. Kontoor Brands is currently generating about -0.09 per unit of risk. If you would invest 16,410 in Procter Gamble on December 1, 2024 and sell it today you would earn a total of 974.00 from holding Procter Gamble or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Kontoor Brands
Performance |
| Timeline |
| Procter Gamble |
| Kontoor Brands |
Procter Gamble and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Kontoor Brands
The main advantage of trading using opposite Procter Gamble and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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