Correlation Between Procter Gamble and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Accenture Plc 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 Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Procter Gamble and Accenture plc, you can compare the effects of market volatilities on Procter Gamble and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Accenture Plc.
Diversification Opportunities for Procter Gamble and Accenture Plc
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procter and Accenture is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 The Procter Gamble are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Procter Gamble i.e., Procter Gamble and Accenture Plc go up and down completely randomly.
Pair Corralation between Procter Gamble and Accenture Plc
Assuming the 90 days trading horizon Procter Gamble is expected to generate 1.03 times less return on investment than Accenture Plc. But when comparing it to its historical volatility, The Procter Gamble is 1.34 times less risky than Accenture Plc. It trades about 0.09 of its potential returns per unit of risk. Accenture plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 150,698 in Accenture plc on September 2, 2024 and sell it today you would earn a total of 67,387 from holding Accenture plc or generate 44.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.89% |
| Values | Daily Returns |
The Procter Gamble vs. Accenture plc
Performance |
| Timeline |
| Procter Gamble |
| Accenture plc |
Procter Gamble and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Accenture Plc
The main advantage of trading using opposite Procter Gamble and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| Procter Gamble vs. United Rentals | Procter Gamble vs. Tyson Foods | Procter Gamble vs. salesforce inc | Procter Gamble vs. Beyond Meat |
| Accenture Plc vs. Fiserv Inc | Accenture Plc vs. Fras le SA | Accenture Plc vs. Energisa SA | Accenture Plc vs. Clave Indices De |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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