Correlation Between Procter Gamble and Planet 13
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Planet 13 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 Planet 13 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Planet 13 Holdings, you can compare the effects of market volatilities on Procter Gamble and Planet 13 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 Planet 13. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Planet 13.
Diversification Opportunities for Procter Gamble and Planet 13
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Planet is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Planet 13 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet 13 Holdings 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 Planet 13. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet 13 Holdings has no effect on the direction of Procter Gamble i.e., Procter Gamble and Planet 13 go up and down completely randomly.
Pair Corralation between Procter Gamble and Planet 13
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.23 times more return on investment than Planet 13. However, Procter Gamble is 4.29 times less risky than Planet 13. It trades about 0.14 of its potential returns per unit of risk. Planet 13 Holdings is currently generating about -0.3 per unit of risk. If you would invest 16,584 in Procter Gamble on September 13, 2024 and sell it today you would earn a total of 507.00 from holding Procter Gamble or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Planet 13 Holdings
Performance |
| Timeline |
| Procter Gamble |
| Planet 13 Holdings |
Procter Gamble and Planet 13 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Planet 13
The main advantage of trading using opposite Procter Gamble and Planet 13 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Planet 13 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 Planet 13 will offset losses from the drop in Planet 13's long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Planet 13 vs. Marfrig Global Foods | Planet 13 vs. Newpark Resources | Planet 13 vs. NH Foods Ltd | Planet 13 vs. AMCON Distributing |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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