Correlation Between Procter Gamble and MRF
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and MRF 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 MRF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble Health and MRF Limited, you can compare the effects of market volatilities on Procter Gamble and MRF 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 MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and MRF.
Diversification Opportunities for Procter Gamble and MRF
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Procter and MRF is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble Health and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited 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 Health are associated (or correlated) with MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of Procter Gamble i.e., Procter Gamble and MRF go up and down completely randomly.
Pair Corralation between Procter Gamble and MRF
Assuming the 90 days trading horizon Procter Gamble is expected to generate 1.12 times less return on investment than MRF. In addition to that, Procter Gamble is 1.21 times more volatile than MRF Limited. It trades about 0.04 of its total potential returns per unit of risk. MRF Limited is currently generating about 0.06 per unit of volatility. If you would invest 9,110,467 in MRF Limited on September 1, 2024 and sell it today you would earn a total of 3,414,633 from holding MRF Limited or generate 37.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Procter Gamble Health vs. MRF Limited
Performance |
| Timeline |
| Procter Gamble Health |
| MRF Limited |
Procter Gamble and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and MRF
The main advantage of trading using opposite Procter Gamble and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, MRF 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 MRF will offset losses from the drop in MRF's long position.| Procter Gamble vs. MRF Limited | Procter Gamble vs. Bosch Limited | Procter Gamble vs. Bajaj Holdings Investment | Procter Gamble vs. Vardhman Holdings Limited |
| MRF vs. Osia Hyper Retail | MRF vs. BF Utilities Limited | MRF vs. Sambhaav Media Limited | MRF vs. Touchwood Entertainment Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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