Correlation Between Procter Gamble and GENERAL
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By analyzing existing cross correlation between Procter Gamble and GENERAL ELEC CAP, you can compare the effects of market volatilities on Procter Gamble and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and GENERAL.
Diversification Opportunities for Procter Gamble and GENERAL
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and GENERAL is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Procter Gamble i.e., Procter Gamble and GENERAL go up and down completely randomly.
Pair Corralation between Procter Gamble and GENERAL
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.47 times more return on investment than GENERAL. However, Procter Gamble is 2.11 times less risky than GENERAL. It trades about 0.05 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about 0.02 per unit of risk. If you would invest 14,205 in Procter Gamble on August 27, 2024 and sell it today you would earn a total of 3,423 from holding Procter Gamble or generate 24.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.75% |
| Values | Daily Returns |
Procter Gamble vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Procter Gamble |
| GENERAL ELEC CAP |
Procter Gamble and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and GENERAL
The main advantage of trading using opposite Procter Gamble and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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