Correlation Between Procter Gamble and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and ProShares UltraShort 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 Procter Gamble and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and ProShares UltraShort MSCI, you can compare the effects of market volatilities on Procter Gamble and ProShares UltraShort 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 Procter Gamble with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and ProShares UltraShort.
Diversification Opportunities for Procter Gamble and ProShares UltraShort
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Procter and ProShares is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and ProShares UltraShort MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort MSCI and Procter Gamble 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 Procter Gamble are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort MSCI has no effect on the direction of Procter Gamble i.e., Procter Gamble and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Procter Gamble and ProShares UltraShort
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.32 times more return on investment than ProShares UltraShort. However, Procter Gamble is 3.09 times less risky than ProShares UltraShort. It trades about 0.36 of its potential returns per unit of risk. ProShares UltraShort MSCI is currently generating about -0.36 per unit of risk. If you would invest 16,150 in Procter Gamble on February 23, 2024 and sell it today you would earn a total of 631.00 from holding Procter Gamble or generate 3.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Procter Gamble vs. ProShares UltraShort MSCI
Performance |
Timeline |
Procter Gamble |
ProShares UltraShort MSCI |
Procter Gamble and ProShares UltraShort Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and ProShares UltraShort
The main advantage of trading using opposite Procter Gamble and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.Procter Gamble vs. CarMax Inc | Procter Gamble vs. Cohu Inc | Procter Gamble vs. Melco Resorts Entertainment | Procter Gamble vs. Volkswagen AG |
ProShares UltraShort vs. ProShares UltraPro QQQ | ProShares UltraShort vs. ProShares UltraPro Short | ProShares UltraShort vs. ProShares Ultra VIX | ProShares UltraShort vs. Direxion Daily SP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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