Correlation Between Procter Gamble and AIM ETF
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and AIM ETF 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 AIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and AIM ETF Products, you can compare the effects of market volatilities on Procter Gamble and AIM ETF 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 AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and AIM ETF.
Diversification Opportunities for Procter Gamble and AIM ETF
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and AIM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products 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 AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of Procter Gamble i.e., Procter Gamble and AIM ETF go up and down completely randomly.
Pair Corralation between Procter Gamble and AIM ETF
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.04 times more return on investment than AIM ETF. However, Procter Gamble is 3.04 times more volatile than AIM ETF Products. It trades about 0.23 of its potential returns per unit of risk. AIM ETF Products is currently generating about 0.22 per unit of risk. If you would invest 16,930 in Procter Gamble on August 29, 2024 and sell it today you would earn a total of 1,001 from holding Procter Gamble or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. AIM ETF Products
Performance |
| Timeline |
| Procter Gamble |
| AIM ETF Products |
Procter Gamble and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and AIM ETF
The main advantage of trading using opposite Procter Gamble and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, AIM ETF 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 AIM ETF will offset losses from the drop in AIM ETF'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 |
| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. First Trust Exchange Traded |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |