Correlation Between Procter Gamble and VMG Consumer
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and VMG Consumer 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 VMG Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and VMG Consumer Acquisition, you can compare the effects of market volatilities on Procter Gamble and VMG Consumer 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 VMG Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and VMG Consumer.
Diversification Opportunities for Procter Gamble and VMG Consumer
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and VMG is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and VMG Consumer Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VMG Consumer Acquisition 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 VMG Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMG Consumer Acquisition has no effect on the direction of Procter Gamble i.e., Procter Gamble and VMG Consumer go up and down completely randomly.
Pair Corralation between Procter Gamble and VMG Consumer
If you would invest 16,717 in Procter Gamble on August 30, 2024 and sell it today you would earn a total of 1,219 from holding Procter Gamble or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Procter Gamble vs. VMG Consumer Acquisition
Performance |
| Timeline |
| Procter Gamble |
| VMG Consumer Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Procter Gamble and VMG Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and VMG Consumer
The main advantage of trading using opposite Procter Gamble and VMG Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, VMG Consumer 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 VMG Consumer will offset losses from the drop in VMG Consumer's long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Church Dwight | Procter Gamble vs. Kimberly Clark |
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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