Correlation Between Procter Gamble and Hillman Solutions

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

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

Diversification Opportunities for Procter Gamble and Hillman Solutions

0.46

Correlation Coefficient

Procter Gamble  Hillman Solutions

Very weak diversification

The 3 months correlation between Procter and Hillman is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Hillman Solutions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillman Solutions Corp 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 Hillman Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillman Solutions Corp has no effect on the direction of Procter Gamble i.e., Procter Gamble and Hillman Solutions go up and down completely randomly.

Pair Corralation between Procter Gamble and Hillman Solutions

Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the Hillman Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Procter Gamble is 1.86 times less risky than Hillman Solutions. The stock trades about -0.07 of its potential returns per unit of risk. The Hillman Solutions Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  987.00  in Hillman Solutions Corp on October 9, 2024 and sell it today you would lose (22.00) from holding Hillman Solutions Corp or give up 2.23% of portfolio value over 90 days.

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

Procter Gamble  vs.  Hillman Solutions Corp

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

Hillman Solutions Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hillman Solutions Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Hillman Solutions is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Procter Gamble and Hillman Solutions

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

The idea behind Procter Gamble and Hillman Solutions Corp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.