Correlation Between Procter Gamble and Identiv
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on Procter Gamble and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Identiv.
Diversification Opportunities for Procter Gamble and Identiv
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procter and Identiv is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Procter Gamble i.e., Procter Gamble and Identiv go up and down completely randomly.
Pair Corralation between Procter Gamble and Identiv
Assuming the 90 days horizon The Procter Gamble is expected to generate 0.23 times more return on investment than Identiv. However, The Procter Gamble is 4.26 times less risky than Identiv. It trades about 0.05 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 13,505 in The Procter Gamble on August 27, 2024 and sell it today you would earn a total of 3,521 from holding The Procter Gamble or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Procter Gamble vs. Identiv
Performance |
| Timeline |
| Procter Gamble |
| Identiv |
Procter Gamble and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Identiv
The main advantage of trading using opposite Procter Gamble and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Procter Gamble vs. Superior Plus Corp | Procter Gamble vs. Origin Agritech | Procter Gamble vs. Identiv | Procter Gamble vs. INTUITIVE SURGICAL |
| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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