Correlation Between Procter Gamble and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Occidental Petroleum 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 Occidental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Occidental Petroleum, you can compare the effects of market volatilities on Procter Gamble and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Occidental Petroleum.
Diversification Opportunities for Procter Gamble and Occidental Petroleum
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Procter and Occidental is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Procter Gamble i.e., Procter Gamble and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Procter Gamble and Occidental Petroleum
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.64 times more return on investment than Occidental Petroleum. However, Procter Gamble is 1.56 times less risky than Occidental Petroleum. It trades about 0.08 of its potential returns per unit of risk. Occidental Petroleum is currently generating about 0.02 per unit of risk. If you would invest 16,958 in Procter Gamble on August 24, 2024 and sell it today you would earn a total of 317.00 from holding Procter Gamble or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Procter Gamble vs. Occidental Petroleum
Performance |
| Timeline |
| Procter Gamble |
| Occidental Petroleum |
Procter Gamble and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Occidental Petroleum
The main advantage of trading using opposite Procter Gamble and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Procter Gamble vs. Eshallgo Class A | Procter Gamble vs. Amtech Systems | Procter Gamble vs. Gold Fields Ltd | Procter Gamble vs. Aegean Airlines SA |
| Occidental Petroleum vs. Petro Rio SA | Occidental Petroleum vs. Banco BTG Pactual | Occidental Petroleum vs. Ambipar Participaes e | Occidental Petroleum vs. Mliuz SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |