Correlation Between Procter Gamble and MSCI
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and MSCI 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 MSCI 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 MSCI Inc, you can compare the effects of market volatilities on Procter Gamble and MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and MSCI.
Diversification Opportunities for Procter Gamble and MSCI
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Procter and MSCI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Procter Gamble i.e., Procter Gamble and MSCI go up and down completely randomly.
Pair Corralation between Procter Gamble and MSCI
Assuming the 90 days trading horizon Procter Gamble is expected to generate 1.23 times less return on investment than MSCI. But when comparing it to its historical volatility, The Procter Gamble is 1.6 times less risky than MSCI. It trades about 0.13 of its potential returns per unit of risk. MSCI Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,645 in MSCI Inc on September 2, 2024 and sell it today you would earn a total of 2,486 from holding MSCI Inc or generate 44.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.0% |
| Values | Daily Returns |
The Procter Gamble vs. MSCI Inc
Performance |
| Timeline |
| Procter Gamble |
| MSCI Inc |
Procter Gamble and MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and MSCI
The main advantage of trading using opposite Procter Gamble and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, MSCI 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 MSCI will offset losses from the drop in MSCI's long position.| Procter Gamble vs. United Rentals | Procter Gamble vs. Tyson Foods | Procter Gamble vs. salesforce inc | Procter Gamble vs. Beyond Meat |
| MSCI vs. Livetech da Bahia | MSCI vs. Raytheon Technologies | MSCI vs. Align Technology | MSCI vs. Monster Beverage |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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