Correlation Between Procter Gamble and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Procter Gamble and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Superior Plus.
Diversification Opportunities for Procter Gamble and Superior Plus
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Superior is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Procter Gamble i.e., Procter Gamble and Superior Plus go up and down completely randomly.
Pair Corralation between Procter Gamble and Superior Plus
Assuming the 90 days horizon The Procter Gamble is expected to generate 0.23 times more return on investment than Superior Plus. However, The Procter Gamble is 4.39 times less risky than Superior Plus. It trades about 0.36 of its potential returns per unit of risk. Superior Plus Corp is currently generating about 0.03 per unit of risk. If you would invest 15,498 in The Procter Gamble on August 30, 2024 and sell it today you would earn a total of 1,506 from holding The Procter Gamble or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Procter Gamble vs. Superior Plus Corp
Performance |
| Timeline |
| Procter Gamble |
| Superior Plus Corp |
Procter Gamble and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Superior Plus
The main advantage of trading using opposite Procter Gamble and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Procter Gamble vs. Verizon Communications | Procter Gamble vs. Lamar Advertising | Procter Gamble vs. Hemisphere Energy Corp | Procter Gamble vs. COMPUTERSHARE |
| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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