Correlation Between Procter Gamble and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and IQ MacKay 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 IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and IQ MacKay Municipal, you can compare the effects of market volatilities on Procter Gamble and IQ MacKay 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 IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and IQ MacKay.
Diversification Opportunities for Procter Gamble and IQ MacKay
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Procter and MMIN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and IQ MacKay Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ MacKay Municipal 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 IQ MacKay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ MacKay Municipal has no effect on the direction of Procter Gamble i.e., Procter Gamble and IQ MacKay go up and down completely randomly.
Pair Corralation between Procter Gamble and IQ MacKay
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 2.8 times more return on investment than IQ MacKay. However, Procter Gamble is 2.8 times more volatile than IQ MacKay Municipal. It trades about 0.17 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.08 per unit of risk. If you would invest 16,930 in Procter Gamble on August 27, 2024 and sell it today you would earn a total of 698.00 from holding Procter Gamble or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. IQ MacKay Municipal
Performance |
| Timeline |
| Procter Gamble |
| IQ MacKay Municipal |
Procter Gamble and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and IQ MacKay
The main advantage of trading using opposite Procter Gamble and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, IQ MacKay 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 IQ MacKay will offset losses from the drop in IQ MacKay'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 |
| IQ MacKay vs. Franklin Liberty Intermediate | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay vs. IQ MacKay Municipal |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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