Correlation Between Procter Gamble and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Maiden 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 Maiden 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 Maiden Holdings, you can compare the effects of market volatilities on Procter Gamble and Maiden 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Maiden Holdings.
Diversification Opportunities for Procter Gamble and Maiden Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Maiden is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Procter Gamble i.e., Procter Gamble and Maiden Holdings go up and down completely randomly.
Pair Corralation between Procter Gamble and Maiden Holdings
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.87 times more return on investment than Maiden Holdings. However, Procter Gamble is 1.15 times less risky than Maiden Holdings. It trades about 0.37 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.15 per unit of risk. If you would invest 16,508 in Procter Gamble on September 3, 2024 and sell it today you would earn a total of 1,418 from holding Procter Gamble or generate 8.59% 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. Maiden Holdings
Performance |
| Timeline |
| Procter Gamble |
| Maiden Holdings |
Procter Gamble and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Maiden Holdings
The main advantage of trading using opposite Procter Gamble and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Procter Gamble vs. Highway Holdings Limited | Procter Gamble vs. QCR Holdings | Procter Gamble vs. Partner Communications | Procter Gamble vs. Acumen Pharmaceuticals |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |