Correlation Between Akamai Technologies, and Procter Gamble

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

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

Diversification Opportunities for Akamai Technologies, and Procter Gamble

0.23

Correlation Coefficient

Akamai Technologies,  Procter Gamble

Modest diversification

The 3 months correlation between Akamai and Procter is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies, and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Akamai Technologies, 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 Akamai Technologies, 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 Akamai Technologies, i.e., Akamai Technologies, and Procter Gamble go up and down completely randomly.

Pair Corralation between Akamai Technologies, and Procter Gamble

Assuming the 90 days trading horizon Akamai Technologies, is expected to generate 1.48 times more return on investment than Procter Gamble. However, Akamai Technologies, is 1.48 times more volatile than The Procter Gamble. It trades about 0.04 of its potential returns per unit of risk. The Procter Gamble is currently generating about 0.04 per unit of risk. If you would invest  4,611  in Akamai Technologies, on October 11, 2024 and sell it today you would earn a total of  159.00  from holding Akamai Technologies, or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Akamai Technologies,  vs.  The Procter Gamble

Akamai Technologies,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akamai Technologies, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Akamai Technologies, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Procter Gamble

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Procter Gamble are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Procter Gamble is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Akamai Technologies, and Procter Gamble

The main advantage of trading using opposite Akamai Technologies, and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies, 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 Akamai Technologies, and The 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 Transaction History module to view history of all your transactions and understand their impact on performance.