Correlation Between Procter Gamble and ETF Series
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and ETF Series Solutions, you can compare the effects of market volatilities on Procter Gamble and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and ETF Series.
Diversification Opportunities for Procter Gamble and ETF Series
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and ETF is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Procter Gamble i.e., Procter Gamble and ETF Series go up and down completely randomly.
Pair Corralation between Procter Gamble and ETF Series
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 1.32 times more return on investment than ETF Series. However, Procter Gamble is 1.32 times more volatile than ETF Series Solutions. It trades about 0.05 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.06 per unit of risk. If you would invest 16,818 in Procter Gamble on August 23, 2024 and sell it today you would earn a total of 457.00 from holding Procter Gamble or generate 2.72% 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. ETF Series Solutions
Performance |
| Timeline |
| Procter Gamble |
| ETF Series Solutions |
Procter Gamble and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and ETF Series
The main advantage of trading using opposite Procter Gamble and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Colgate Palmolive |
| ETF Series vs. Aptus Collared Income | ETF Series vs. Core Alternative ETF | ETF Series vs. Aptus Drawdown Managed | ETF Series vs. Amplify BlackSwan Growth |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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