Correlation Between Suburban Propane and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Suburban Propane 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 Suburban Propane and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and Procter Gamble, you can compare the effects of market volatilities on Suburban Propane 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 Suburban Propane with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Procter Gamble.
Diversification Opportunities for Suburban Propane and Procter Gamble
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Suburban and Procter is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Suburban Propane 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 Suburban Propane Partners 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 has no effect on the direction of Suburban Propane i.e., Suburban Propane and Procter Gamble go up and down completely randomly.
Pair Corralation between Suburban Propane and Procter Gamble
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 1.85 times more return on investment than Procter Gamble. However, Suburban Propane is 1.85 times more volatile than Procter Gamble. It trades about 0.06 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.06 per unit of risk. If you would invest 1,323 in Suburban Propane Partners on November 27, 2024 and sell it today you would earn a total of 803.00 from holding Suburban Propane Partners or generate 60.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Procter Gamble
Performance |
| Timeline |
| Suburban Propane Partners |
| Procter Gamble |
Suburban Propane and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Procter Gamble
The main advantage of trading using opposite Suburban Propane and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane 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.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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