Correlation Between Sakar Healthcare and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Sakar Healthcare and Procter Gamble 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 Sakar Healthcare and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sakar Healthcare Limited and Procter Gamble Health, you can compare the effects of market volatilities on Sakar Healthcare and Procter Gamble 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 Sakar Healthcare with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sakar Healthcare and Procter Gamble.
Diversification Opportunities for Sakar Healthcare and Procter Gamble
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sakar and Procter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and Procter Gamble Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble Health and Sakar Healthcare 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 Sakar Healthcare Limited are associated (or correlated) with Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble Health has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and Procter Gamble go up and down completely randomly.
Pair Corralation between Sakar Healthcare and Procter Gamble
Assuming the 90 days trading horizon Sakar Healthcare Limited is expected to generate 2.22 times more return on investment than Procter Gamble. However, Sakar Healthcare is 2.22 times more volatile than Procter Gamble Health. It trades about 0.04 of its potential returns per unit of risk. Procter Gamble Health is currently generating about 0.03 per unit of risk. If you would invest 22,520 in Sakar Healthcare Limited on August 26, 2024 and sell it today you would earn a total of 6,105 from holding Sakar Healthcare Limited or generate 27.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Sakar Healthcare Limited vs. Procter Gamble Health
Performance |
| Timeline |
| Sakar Healthcare |
| Procter Gamble Health |
Sakar Healthcare and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sakar Healthcare and Procter Gamble
The main advantage of trading using opposite Sakar Healthcare and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sakar Healthcare position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Sakar Healthcare vs. Kingfa Science Technology | Sakar Healthcare vs. Rico Auto Industries | Sakar Healthcare vs. GACM Technologies Limited | Sakar Healthcare vs. COSMO FIRST LIMITED |
| Procter Gamble vs. Kingfa Science Technology | Procter Gamble vs. Rico Auto Industries | Procter Gamble vs. GACM Technologies Limited | Procter Gamble vs. COSMO FIRST 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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