Correlation Between Procter Gamble and CHS
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and CHS 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 CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and CHS Inc Pref, you can compare the effects of market volatilities on Procter Gamble and CHS 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 CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and CHS.
Diversification Opportunities for Procter Gamble and CHS
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and CHS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and CHS Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc Pref 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 CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc Pref has no effect on the direction of Procter Gamble i.e., Procter Gamble and CHS go up and down completely randomly.
Pair Corralation between Procter Gamble and CHS
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.01 times more return on investment than CHS. However, Procter Gamble is 3.01 times more volatile than CHS Inc Pref. It trades about 0.1 of its potential returns per unit of risk. CHS Inc Pref is currently generating about -0.12 per unit of risk. If you would invest 16,497 in Procter Gamble on December 2, 2024 and sell it today you would earn a total of 887.00 from holding Procter Gamble or generate 5.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Procter Gamble vs. CHS Inc Pref
Performance |
Timeline |
Procter Gamble |
CHS Inc Pref |
Procter Gamble and CHS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and CHS
The main advantage of trading using opposite Procter Gamble and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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