Correlation Between Procter Gamble and Lyons Bancorp
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Lyons Bancorp 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 Lyons Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Lyons Bancorp, you can compare the effects of market volatilities on Procter Gamble and Lyons Bancorp 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 Lyons Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Lyons Bancorp.
Diversification Opportunities for Procter Gamble and Lyons Bancorp
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and Lyons is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Lyons Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyons Bancorp 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 Lyons Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyons Bancorp has no effect on the direction of Procter Gamble i.e., Procter Gamble and Lyons Bancorp go up and down completely randomly.
Pair Corralation between Procter Gamble and Lyons Bancorp
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 1.71 times less return on investment than Lyons Bancorp. In addition to that, Procter Gamble is 1.07 times more volatile than Lyons Bancorp. It trades about 0.06 of its total potential returns per unit of risk. Lyons Bancorp is currently generating about 0.11 per unit of volatility. If you would invest 3,910 in Lyons Bancorp on August 25, 2024 and sell it today you would earn a total of 165.00 from holding Lyons Bancorp or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Lyons Bancorp
Performance |
| Timeline |
| Procter Gamble |
| Lyons Bancorp |
Procter Gamble and Lyons Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Lyons Bancorp
The main advantage of trading using opposite Procter Gamble and Lyons Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Lyons Bancorp 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 Lyons Bancorp will offset losses from the drop in Lyons Bancorp'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 |
| Lyons Bancorp vs. FS Bancorp | Lyons Bancorp vs. Eastern Michigan Financial | Lyons Bancorp vs. Grand River Commerce | Lyons Bancorp vs. Bank of Botetourt |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |