Correlation Between Procter Gamble and Sienna Senior
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Sienna Senior 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 Sienna Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Sienna Senior Living, you can compare the effects of market volatilities on Procter Gamble and Sienna Senior 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 Sienna Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Sienna Senior.
Diversification Opportunities for Procter Gamble and Sienna Senior
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Sienna is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living 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 Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Procter Gamble i.e., Procter Gamble and Sienna Senior go up and down completely randomly.
Pair Corralation between Procter Gamble and Sienna Senior
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.96 times more return on investment than Sienna Senior. However, Procter Gamble is 1.04 times less risky than Sienna Senior. It trades about 0.35 of its potential returns per unit of risk. Sienna Senior Living is currently generating about -0.17 per unit of risk. If you would invest 16,518 in Procter Gamble on September 1, 2024 and sell it today you would earn a total of 1,408 from holding Procter Gamble or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Procter Gamble vs. Sienna Senior Living
Performance |
| Timeline |
| Procter Gamble |
| Sienna Senior Living |
Procter Gamble and Sienna Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Sienna Senior
The main advantage of trading using opposite Procter Gamble and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Sienna Senior 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 Sienna Senior will offset losses from the drop in Sienna Senior'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 |
| Sienna Senior vs. Brainsway | Sienna Senior vs. Venus Concept | Sienna Senior vs. Tactile Systems Technology | Sienna Senior vs. Icecure Medical |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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