Correlation Between Procter Gamble and Kering SA
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Kering SA, you can compare the effects of market volatilities on Procter Gamble and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Kering SA.
Diversification Opportunities for Procter Gamble and Kering SA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Procter and Kering is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Procter Gamble i.e., Procter Gamble and Kering SA go up and down completely randomly.
Pair Corralation between Procter Gamble and Kering SA
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.39 times more return on investment than Kering SA. However, Procter Gamble is 2.58 times less risky than Kering SA. It trades about 0.07 of its potential returns per unit of risk. Kering SA is currently generating about -0.14 per unit of risk. If you would invest 15,606 in Procter Gamble on August 27, 2024 and sell it today you would earn a total of 2,022 from holding Procter Gamble or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Kering SA
Performance |
| Timeline |
| Procter Gamble |
| Kering SA |
Procter Gamble and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Kering SA
The main advantage of trading using opposite Procter Gamble and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Kering SA vs. Burberry Group Plc | Kering SA vs. Swatch Group AG | Kering SA vs. Prada Spa PK | Kering SA vs. Compagnie Financire Richemont |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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