Correlation Between Procter Gamble and United States
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and United States Oil, you can compare the effects of market volatilities on Procter Gamble and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and United States.
Diversification Opportunities for Procter Gamble and United States
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and United is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of Procter Gamble i.e., Procter Gamble and United States go up and down completely randomly.
Pair Corralation between Procter Gamble and United States
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.64 times more return on investment than United States. However, Procter Gamble is 1.55 times less risky than United States. It trades about 0.19 of its potential returns per unit of risk. United States Oil is currently generating about 0.07 per unit of risk. If you would invest 16,930 in Procter Gamble on August 28, 2024 and sell it today you would earn a total of 809.00 from holding Procter Gamble or generate 4.78% 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. United States Oil
Performance |
| Timeline |
| Procter Gamble |
| United States Oil |
Procter Gamble and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and United States
The main advantage of trading using opposite Procter Gamble and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| United States vs. United States Natural | United States vs. SPDR Gold Shares | United States vs. ProShares Ultra Bloomberg | United States vs. Energy Select Sector |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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