Correlation Between United Guardian and Church Dwight
Can any of the company-specific risk be diversified away by investing in both United Guardian and Church Dwight 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 United Guardian and Church Dwight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Church Dwight, you can compare the effects of market volatilities on United Guardian and Church Dwight 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 United Guardian with a short position of Church Dwight. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Church Dwight.
Diversification Opportunities for United Guardian and Church Dwight
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Church is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Church Dwight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Dwight and United Guardian 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 United Guardian are associated (or correlated) with Church Dwight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Dwight has no effect on the direction of United Guardian i.e., United Guardian and Church Dwight go up and down completely randomly.
Pair Corralation between United Guardian and Church Dwight
Allowing for the 90-day total investment horizon United Guardian is expected to generate 3.03 times more return on investment than Church Dwight. However, United Guardian is 3.03 times more volatile than Church Dwight. It trades about 0.05 of its potential returns per unit of risk. Church Dwight is currently generating about 0.07 per unit of risk. If you would invest 803.00 in United Guardian on August 27, 2024 and sell it today you would earn a total of 172.00 from holding United Guardian or generate 21.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Church Dwight
Performance |
| Timeline |
| United Guardian |
| Church Dwight |
United Guardian and Church Dwight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Church Dwight
The main advantage of trading using opposite United Guardian and Church Dwight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, Church Dwight 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 Church Dwight will offset losses from the drop in Church Dwight's long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
| Church Dwight vs. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |