Correlation Between Advani Hotels and Procter Gamble

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

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

Diversification Opportunities for Advani Hotels and Procter Gamble

0.33

Correlation Coefficient

Advani Hotels  Procter Gamble

Weak diversification

The 3 months correlation between Advani and Procter is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Advani Hotels Resorts and Procter Gamble Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble Health and Advani Hotels 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 Advani Hotels Resorts 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 Health has no effect on the direction of Advani Hotels i.e., Advani Hotels and Procter Gamble go up and down completely randomly.

Pair Corralation between Advani Hotels and Procter Gamble

Assuming the 90 days trading horizon Advani Hotels Resorts is expected to under-perform the Procter Gamble. In addition to that, Advani Hotels is 1.25 times more volatile than Procter Gamble Health. It trades about -0.13 of its total potential returns per unit of risk. Procter Gamble Health is currently generating about 0.0 per unit of volatility. If you would invest  509,544  in Procter Gamble Health on December 1, 2024 and sell it today you would lose (6,139) from holding Procter Gamble Health or give up 1.2% of portfolio value over 90 days.

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

Advani Hotels Resorts  vs.  Procter Gamble Health

Advani Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advani Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Procter Gamble Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procter Gamble Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Procter Gamble is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Advani Hotels and Procter Gamble

The main advantage of trading using opposite Advani Hotels and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advani Hotels 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 Advani Hotels Resorts and Procter Gamble Health 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.