Correlation Between Procter Gamble and Zebra Technologies
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Zebra Technologies 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 Zebra Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Zebra Technologies, you can compare the effects of market volatilities on Procter Gamble and Zebra Technologies 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 Zebra Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Zebra Technologies.
Diversification Opportunities for Procter Gamble and Zebra Technologies
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Zebra is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Zebra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zebra Technologies 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 Zebra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zebra Technologies has no effect on the direction of Procter Gamble i.e., Procter Gamble and Zebra Technologies go up and down completely randomly.
Pair Corralation between Procter Gamble and Zebra Technologies
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.86 times more return on investment than Zebra Technologies. However, Procter Gamble is 1.17 times less risky than Zebra Technologies. It trades about 0.32 of its potential returns per unit of risk. Zebra Technologies is currently generating about 0.2 per unit of risk. If you would invest 16,616 in Procter Gamble on August 31, 2024 and sell it today you would earn a total of 1,320 from holding Procter Gamble or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Zebra Technologies
Performance |
| Timeline |
| Procter Gamble |
| Zebra Technologies |
Procter Gamble and Zebra Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Zebra Technologies
The main advantage of trading using opposite Procter Gamble and Zebra Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Zebra Technologies 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 Zebra Technologies will offset losses from the drop in Zebra Technologies' long position.| Procter Gamble vs. Aquagold International | Procter Gamble vs. Morningstar Unconstrained Allocation | Procter Gamble vs. Thrivent High Yield | Procter Gamble vs. Via Renewables |
| Zebra Technologies vs. Credo Technology Group | Zebra Technologies vs. Ubiquiti Networks | Zebra Technologies vs. Ciena Corp | Zebra Technologies vs. Clearfield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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