Correlation Between Procter Gamble and Inception Growth

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

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

Diversification Opportunities for Procter Gamble and Inception Growth

0.37

Correlation Coefficient

Procter Gamble  Inception Growth

Weak diversification

The 3 months correlation between Procter and Inception is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Inception Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inception Growth Acq 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 Inception Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inception Growth Acq has no effect on the direction of Procter Gamble i.e., Procter Gamble and Inception Growth go up and down completely randomly.

Pair Corralation between Procter Gamble and Inception Growth

Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the Inception Growth. In addition to that, Procter Gamble is 1.59 times more volatile than Inception Growth Acquisition. It trades about -0.01 of its total potential returns per unit of risk. Inception Growth Acquisition is currently generating about 0.39 per unit of volatility. If you would invest  1,141  in Inception Growth Acquisition on September 19, 2024 and sell it today you would earn a total of  59.00  from holding Inception Growth Acquisition or generate 5.17% return on investment over 90 days.

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

Procter Gamble  vs.  Inception Growth Acquisition

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

Inception Growth Acq

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inception Growth Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inception Growth is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Procter Gamble and Inception Growth

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

The idea behind Procter Gamble and Inception Growth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.