Correlation Between Procter Gamble and Grayscale Litecoin Trust
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Grayscale Litecoin Trust 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 Grayscale Litecoin Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Grayscale Litecoin Trust, you can compare the effects of market volatilities on Procter Gamble and Grayscale Litecoin Trust 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 Grayscale Litecoin Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Grayscale Litecoin Trust.
Diversification Opportunities for Procter Gamble and Grayscale Litecoin Trust
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Procter and Grayscale is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Grayscale Litecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Litecoin Trust 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 Grayscale Litecoin Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Litecoin Trust has no effect on the direction of Procter Gamble i.e., Procter Gamble and Grayscale Litecoin Trust go up and down completely randomly.
Pair Corralation between Procter Gamble and Grayscale Litecoin Trust
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 4.02 times less return on investment than Grayscale Litecoin Trust. But when comparing it to its historical volatility, Procter Gamble is 3.75 times less risky than Grayscale Litecoin Trust. It trades about 0.04 of its potential returns per unit of risk. Grayscale Litecoin Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,097 in Grayscale Litecoin Trust on November 28, 2024 and sell it today you would earn a total of 20.00 from holding Grayscale Litecoin Trust or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Grayscale Litecoin Trust
Performance |
| Timeline |
| Procter Gamble |
| Grayscale Litecoin Trust |
Procter Gamble and Grayscale Litecoin Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Grayscale Litecoin Trust
The main advantage of trading using opposite Procter Gamble and Grayscale Litecoin Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Grayscale Litecoin Trust 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 Grayscale Litecoin Trust will offset losses from the drop in Grayscale Litecoin Trust's long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
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..
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |