Correlation Between Infusion Brands and Procter Gamble

Can any of the company-specific risk be diversified away by investing in both Infusion Brands 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 Infusion Brands and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infusion Brands International and Procter Gamble, you can compare the effects of market volatilities on Infusion Brands 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 Infusion Brands with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infusion Brands and Procter Gamble.

Diversification Opportunities for Infusion Brands and Procter Gamble

0.0

Correlation Coefficient

Infusion Brands  Procter Gamble

Pay attention - limited upside

The 3 months correlation between Infusion and Procter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Infusion Brands International and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Infusion Brands 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 Infusion Brands International 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 Infusion Brands i.e., Infusion Brands and Procter Gamble go up and down completely randomly.

Pair Corralation between Infusion Brands and Procter Gamble

If you would invest (100.00) in Infusion Brands International on January 18, 2024 and sell it today you would earn a total of  100.00  from holding Infusion Brands International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Infusion Brands International  vs.  Procter Gamble

Infusion Brands Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infusion Brands International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Infusion Brands is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Procter Gamble

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Infusion Brands and Procter Gamble

The main advantage of trading using opposite Infusion Brands and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infusion Brands 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 Infusion Brands International 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.