Correlation Between Procter Gamble and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Barclays Capital, you can compare the effects of market volatilities on Procter Gamble and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Barclays Capital.
Diversification Opportunities for Procter Gamble and Barclays Capital
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Barclays is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Procter Gamble i.e., Procter Gamble and Barclays Capital go up and down completely randomly.
Pair Corralation between Procter Gamble and Barclays Capital
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.49 times more return on investment than Barclays Capital. However, Procter Gamble is 2.04 times less risky than Barclays Capital. It trades about 0.05 of its potential returns per unit of risk. Barclays Capital is currently generating about -0.01 per unit of risk. If you would invest 14,332 in Procter Gamble on August 23, 2024 and sell it today you would earn a total of 2,943 from holding Procter Gamble or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.45% |
| Values | Daily Returns |
Procter Gamble vs. Barclays Capital
Performance |
| Timeline |
| Procter Gamble |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Procter Gamble and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Barclays Capital
The main advantage of trading using opposite Procter Gamble and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Colgate Palmolive |
| Barclays Capital vs. United States Oil | Barclays Capital vs. Invesco DB Oil | Barclays Capital vs. ProShares Ultra Bloomberg | Barclays Capital vs. United States Natural |
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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