Correlation Between Procter Gamble and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Macmahon Holdings 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 Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Macmahon Holdings Limited, you can compare the effects of market volatilities on Procter Gamble and Macmahon Holdings 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 Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Macmahon Holdings.
Diversification Opportunities for Procter Gamble and Macmahon Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procter and Macmahon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings 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 Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Procter Gamble i.e., Procter Gamble and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Procter Gamble and Macmahon Holdings
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 64.04 times less return on investment than Macmahon Holdings. But when comparing it to its historical volatility, Procter Gamble is 4.31 times less risky than Macmahon Holdings. It trades about 0.0 of its potential returns per unit of risk. Macmahon Holdings Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Macmahon Holdings Limited on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Macmahon Holdings Limited or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Procter Gamble vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Procter Gamble |
| Macmahon Holdings |
Procter Gamble and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Macmahon Holdings
The main advantage of trading using opposite Procter Gamble and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Macmahon Holdings 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 Macmahon Holdings will offset losses from the drop in Macmahon Holdings' long position.| Procter Gamble vs. ProShares Russell Dividend | Procter Gamble vs. United Rentals | Procter Gamble vs. Kforce Inc | Procter Gamble vs. The Ensign Group |
| Macmahon Holdings vs. Space Communication | Macmahon Holdings vs. Mangazeya Mining | Macmahon Holdings vs. Pinterest | Macmahon Holdings vs. Iridium Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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