Correlation Between Procter Gamble and AMERICAN
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By analyzing existing cross correlation between Procter Gamble and AMERICAN INTL GROUP, you can compare the effects of market volatilities on Procter Gamble and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and AMERICAN.
Diversification Opportunities for Procter Gamble and AMERICAN
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and AMERICAN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and AMERICAN INTL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN INTL GROUP 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN INTL GROUP has no effect on the direction of Procter Gamble i.e., Procter Gamble and AMERICAN go up and down completely randomly.
Pair Corralation between Procter Gamble and AMERICAN
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.42 times more return on investment than AMERICAN. However, Procter Gamble is 2.39 times less risky than AMERICAN. It trades about 0.07 of its potential returns per unit of risk. AMERICAN INTL GROUP is currently generating about 0.03 per unit of risk. If you would invest 14,110 in Procter Gamble on August 31, 2024 and sell it today you would earn a total of 3,816 from holding Procter Gamble or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.88% |
| Values | Daily Returns |
Procter Gamble vs. AMERICAN INTL GROUP
Performance |
| Timeline |
| Procter Gamble |
| AMERICAN INTL GROUP |
Procter Gamble and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and AMERICAN
The main advantage of trading using opposite Procter Gamble and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Procter Gamble vs. Aquagold International | Procter Gamble vs. Morningstar Unconstrained Allocation | Procter Gamble vs. Thrivent High Yield | Procter Gamble vs. Via Renewables |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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