Correlation Between Procter Gamble and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Listed Funds 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 Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Listed Funds Trust, you can compare the effects of market volatilities on Procter Gamble and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Listed Funds.
Diversification Opportunities for Procter Gamble and Listed Funds
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Listed is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Procter Gamble i.e., Procter Gamble and Listed Funds go up and down completely randomly.
Pair Corralation between Procter Gamble and Listed Funds
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 8.43 times more return on investment than Listed Funds. However, Procter Gamble is 8.43 times more volatile than Listed Funds Trust. It trades about 0.38 of its potential returns per unit of risk. Listed Funds Trust is currently generating about -0.14 per unit of risk. If you would invest 16,508 in Procter Gamble on September 3, 2024 and sell it today you would earn a total of 1,462 from holding Procter Gamble or generate 8.86% 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. Listed Funds Trust
Performance |
| Timeline |
| Procter Gamble |
| Listed Funds Trust |
Procter Gamble and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Listed Funds
The main advantage of trading using opposite Procter Gamble and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| Procter Gamble vs. Highway Holdings Limited | Procter Gamble vs. QCR Holdings | Procter Gamble vs. Partner Communications | Procter Gamble vs. Acumen Pharmaceuticals |
| Listed Funds vs. Vanguard Industrials Index | Listed Funds vs. Vanguard Consumer Discretionary | Listed Funds vs. Vanguard Materials Index | Listed Funds vs. Vanguard Health Care |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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