Correlation Between Procter Gamble and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Xinjiang Goldwind 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 Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Procter Gamble and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Xinjiang Goldwind.
Diversification Opportunities for Procter Gamble and Xinjiang Goldwind
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Xinjiang is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Procter Gamble i.e., Procter Gamble and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Procter Gamble and Xinjiang Goldwind
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.35 times more return on investment than Xinjiang Goldwind. However, Procter Gamble is 2.86 times less risky than Xinjiang Goldwind. It trades about -0.06 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.21 per unit of risk. If you would invest 17,827 in Procter Gamble on November 27, 2024 and sell it today you would lose (773.00) from holding Procter Gamble or give up 4.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.97% |
| Values | Daily Returns |
Procter Gamble vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Procter Gamble |
| Xinjiang Goldwind Science |
Procter Gamble and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Xinjiang Goldwind
The main advantage of trading using opposite Procter Gamble and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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