Correlation Between Procter Gamble and Financial Strategies

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

By analyzing existing cross correlation between Procter Gamble and Financial Strategies Acquisition, you can compare the effects of market volatilities on Procter Gamble and Financial Strategies 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 Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Financial Strategies.

Diversification Opportunities for Procter Gamble and Financial Strategies

0.0

Correlation Coefficient

Procter Gamble  Financial Strategies

Pay attention - limited upside

The 3 months correlation between Procter and Financial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies 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 Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Procter Gamble i.e., Procter Gamble and Financial Strategies go up and down completely randomly.

Pair Corralation between Procter Gamble and Financial Strategies

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 128.96 times less return on investment than Financial Strategies. But when comparing it to its historical volatility, Procter Gamble is 36.24 times less risky than Financial Strategies. It trades about 0.04 of its potential returns per unit of risk. Financial Strategies Acquisition is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Financial Strategies Acquisition on October 10, 2024 and sell it today you would earn a total of  6.00  from holding Financial Strategies Acquisition or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	12.32%
Values	Daily Returns

Procter Gamble  vs.  Financial Strategies Acquisiti

Procter Gamble

Risk-Adjusted Performance

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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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Financial Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Financial Strategies Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Financial Strategies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Procter Gamble and Financial Strategies

The main advantage of trading using opposite Procter Gamble and Financial Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Financial Strategies 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 Financial Strategies will offset losses from the drop in Financial Strategies' long position.

The idea behind Procter Gamble and Financial Strategies Acquisition 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..