Correlation Between Procter Gamble and Texas Capital
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Texas Capital 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 Texas Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Texas Capital Bancshares, you can compare the effects of market volatilities on Procter Gamble and Texas Capital 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 Texas Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Texas Capital.
Diversification Opportunities for Procter Gamble and Texas Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Texas is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Texas Capital Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Capital Bancshares 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 Texas Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Capital Bancshares has no effect on the direction of Procter Gamble i.e., Procter Gamble and Texas Capital go up and down completely randomly.
Pair Corralation between Procter Gamble and Texas Capital
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 5.15 times less return on investment than Texas Capital. But when comparing it to its historical volatility, Procter Gamble is 2.56 times less risky than Texas Capital. It trades about 0.08 of its potential returns per unit of risk. Texas Capital Bancshares is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,745 in Texas Capital Bancshares on August 24, 2024 and sell it today you would earn a total of 763.00 from holding Texas Capital Bancshares or generate 9.85% 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. Texas Capital Bancshares
Performance |
| Timeline |
| Procter Gamble |
| Texas Capital Bancshares |
Procter Gamble and Texas Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Texas Capital
The main advantage of trading using opposite Procter Gamble and Texas Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Texas Capital 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 Texas Capital will offset losses from the drop in Texas Capital's 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 |
| Texas Capital vs. Heartland Financial USA | Texas Capital vs. Heritage Commerce Corp | Texas Capital vs. Business First Bancshares | Texas Capital vs. German American Bancorp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |