Correlation Between Procter Gamble and Stratasys
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Stratasys 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 Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Stratasys, you can compare the effects of market volatilities on Procter Gamble and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Stratasys.
Diversification Opportunities for Procter Gamble and Stratasys
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Stratasys is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Procter Gamble i.e., Procter Gamble and Stratasys go up and down completely randomly.
Pair Corralation between Procter Gamble and Stratasys
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 14.67 times less return on investment than Stratasys. But when comparing it to its historical volatility, Procter Gamble is 5.93 times less risky than Stratasys. It trades about 0.08 of its potential returns per unit of risk. Stratasys is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Stratasys on August 24, 2024 and sell it today you would earn a total of 206.00 from holding Stratasys or generate 28.1% 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. Stratasys
Performance |
| Timeline |
| Procter Gamble |
| Stratasys |
Procter Gamble and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Stratasys
The main advantage of trading using opposite Procter Gamble and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| Procter Gamble vs. Eshallgo Class A | Procter Gamble vs. Amtech Systems | Procter Gamble vs. Gold Fields Ltd | Procter Gamble vs. Aegean Airlines SA |
| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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