Correlation Between Procter Gamble and Pinterest
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Pinterest, you can compare the effects of market volatilities on Procter Gamble and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Pinterest.
Diversification Opportunities for Procter Gamble and Pinterest
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Procter and Pinterest is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Procter Gamble i.e., Procter Gamble and Pinterest go up and down completely randomly.
Pair Corralation between Procter Gamble and Pinterest
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.29 times more return on investment than Pinterest. However, Procter Gamble is 3.42 times less risky than Pinterest. It trades about -0.1 of its potential returns per unit of risk. Pinterest is currently generating about -0.13 per unit of risk. If you would invest 17,054 in Procter Gamble on December 26, 2024 and sell it today you would lose (396.00) from holding Procter Gamble or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Pinterest
Performance |
| Timeline |
| Procter Gamble |
Procter Gamble and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Pinterest
The main advantage of trading using opposite Procter Gamble and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight | Procter Gamble vs. Kimberly Clark |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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