Correlation Between Procter Gamble and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and TTM Technologies 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 TTM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and TTM Technologies, you can compare the effects of market volatilities on Procter Gamble and TTM Technologies 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 TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and TTM Technologies.
Diversification Opportunities for Procter Gamble and TTM Technologies
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and TTM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Procter Gamble i.e., Procter Gamble and TTM Technologies go up and down completely randomly.
Pair Corralation between Procter Gamble and TTM Technologies
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.03 times less return on investment than TTM Technologies. But when comparing it to its historical volatility, Procter Gamble is 3.34 times less risky than TTM Technologies. It trades about 0.28 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,971 in TTM Technologies on August 30, 2024 and sell it today you would earn a total of 443.00 from holding TTM Technologies or generate 22.48% 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. TTM Technologies
Performance |
| Timeline |
| Procter Gamble |
| TTM Technologies |
Procter Gamble and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and TTM Technologies
The main advantage of trading using opposite Procter Gamble and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, TTM Technologies 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 TTM Technologies will offset losses from the drop in TTM Technologies' long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Kimberly Clark |
| TTM Technologies vs. Sanmina | TTM Technologies vs. Benchmark Electronics | TTM Technologies vs. Methode Electronics | TTM Technologies vs. OSI Systems |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |