Correlation Between Procter Gamble and Montage Gold
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Montage Gold 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 Montage Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Montage Gold Corp, you can compare the effects of market volatilities on Procter Gamble and Montage Gold 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 Montage Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Montage Gold.
Diversification Opportunities for Procter Gamble and Montage Gold
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Montage is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Montage Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Gold Corp 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 Montage Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Gold Corp has no effect on the direction of Procter Gamble i.e., Procter Gamble and Montage Gold go up and down completely randomly.
Pair Corralation between Procter Gamble and Montage Gold
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 6.32 times less return on investment than Montage Gold. But when comparing it to its historical volatility, Procter Gamble is 3.8 times less risky than Montage Gold. It trades about 0.05 of its potential returns per unit of risk. Montage Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Montage Gold Corp on September 1, 2024 and sell it today you would earn a total of 108.00 from holding Montage Gold Corp or generate 220.41% 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. Montage Gold Corp
Performance |
| Timeline |
| Procter Gamble |
| Montage Gold Corp |
Procter Gamble and Montage Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Montage Gold
The main advantage of trading using opposite Procter Gamble and Montage Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Montage Gold 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 Montage Gold will offset losses from the drop in Montage Gold'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 |
| Montage Gold vs. Aurion Resources | Montage Gold vs. Rio2 Limited | Montage Gold vs. Palamina Corp | Montage Gold vs. BTU Metals Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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