Correlation Between 260543CG6 and Procter Gamble
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By analyzing existing cross correlation between DOW CHEM 4375 and Procter Gamble, you can compare the effects of market volatilities on 260543CG6 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 260543CG6 with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of 260543CG6 and Procter Gamble.
Diversification Opportunities for 260543CG6 and Procter Gamble
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 260543CG6 and Procter is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DOW CHEM 4375 and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and 260543CG6 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 DOW CHEM 4375 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 260543CG6 i.e., 260543CG6 and Procter Gamble go up and down completely randomly.
Pair Corralation between 260543CG6 and Procter Gamble
Assuming the 90 days trading horizon 260543CG6 is expected to generate 1.46 times less return on investment than Procter Gamble. But when comparing it to its historical volatility, DOW CHEM 4375 is 1.15 times less risky than Procter Gamble. It trades about 0.22 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 16,717 in Procter Gamble on August 30, 2024 and sell it today you would earn a total of 1,219 from holding Procter Gamble or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
DOW CHEM 4375 vs. Procter Gamble
Performance |
| Timeline |
| DOW CHEM 4375 |
| Procter Gamble |
260543CG6 and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 260543CG6 and Procter Gamble
The main advantage of trading using opposite 260543CG6 and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 260543CG6 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.| 260543CG6 vs. AEP TEX INC | 260543CG6 vs. US BANK NATIONAL | 260543CG6 vs. Nasdaq Inc | 260543CG6 vs. Vertiv Holdings Co |
| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Kimberly Clark |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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