Correlation Between Procter Gamble and Hugo Boss
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Hugo Boss 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 Hugo Boss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Hugo Boss AG, you can compare the effects of market volatilities on Procter Gamble and Hugo Boss 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 Hugo Boss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Hugo Boss.
Diversification Opportunities for Procter Gamble and Hugo Boss
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Hugo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Hugo Boss AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hugo Boss AG 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 Hugo Boss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hugo Boss AG has no effect on the direction of Procter Gamble i.e., Procter Gamble and Hugo Boss go up and down completely randomly.
Pair Corralation between Procter Gamble and Hugo Boss
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.32 times more return on investment than Hugo Boss. However, Procter Gamble is 3.17 times less risky than Hugo Boss. It trades about -0.13 of its potential returns per unit of risk. Hugo Boss AG is currently generating about -0.09 per unit of risk. If you would invest 16,095 in Procter Gamble on January 20, 2024 and sell it today you would lose (366.00) from holding Procter Gamble or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Hugo Boss AG
Performance |
| Timeline |
| Procter Gamble |
| Hugo Boss AG |
Procter Gamble and Hugo Boss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Hugo Boss
The main advantage of trading using opposite Procter Gamble and Hugo Boss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Hugo Boss 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 Hugo Boss will offset losses from the drop in Hugo Boss' long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Hugo Boss vs. SOGECLAIR SA INH | Hugo Boss vs. NORWEGIAN AIR SHUT | Hugo Boss vs. Arrow Electronics | Hugo Boss vs. LG Electronics |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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