Correlation Between US Commodity and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both US Commodity 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 US Commodity and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Commodity Funds and Procter Gamble, you can compare the effects of market volatilities on US Commodity 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 US Commodity with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and Procter Gamble.
Diversification Opportunities for US Commodity and Procter Gamble
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USOU and Procter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and US Commodity 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 US Commodity Funds 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 US Commodity i.e., US Commodity and Procter Gamble go up and down completely randomly.
Pair Corralation between US Commodity and Procter Gamble
If you would invest 14,530 in Procter Gamble on January 25, 2024 and sell it today you would earn a total of 1,730 from holding Procter Gamble or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
US Commodity Funds vs. Procter Gamble
Performance |
| Timeline |
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Procter Gamble |
US Commodity and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Commodity and Procter Gamble
The main advantage of trading using opposite US Commodity and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity 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.The idea behind US Commodity Funds and Procter Gamble pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. European Wax Center |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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