Correlation Between Mill City and Procter Gamble

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

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

Diversification Opportunities for Mill City and Procter Gamble

-0.22

Correlation Coefficient

Mill City  Procter Gamble

Very good diversification

The 3 months correlation between Mill and Procter is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and Procter Gamble go up and down completely randomly.

Pair Corralation between Mill City and Procter Gamble

Given the investment horizon of 90 days Mill City Ventures is expected to generate 3.22 times more return on investment than Procter Gamble. However, Mill City is 3.22 times more volatile than Procter Gamble. It trades about 0.02 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.0 per unit of risk. If you would invest  196.00  in Mill City Ventures on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Mill City Ventures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mill City Ventures  vs.  Procter Gamble

Mill City Ventures

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mill City is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Procter Gamble

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procter Gamble has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mill City and Procter Gamble

The main advantage of trading using opposite Mill City and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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 Mill City Ventures 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.