Correlation Between Procter Gamble and Sarthak Metals

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Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Sarthak Metals 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 Sarthak Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble Health and Sarthak Metals Limited, you can compare the effects of market volatilities on Procter Gamble and Sarthak Metals 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 Sarthak Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Sarthak Metals.

Diversification Opportunities for Procter Gamble and Sarthak Metals

ProcterSarthakDiversified AwayProcterSarthakDiversified Away100%
-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Procter and Sarthak is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble Health and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals 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 Health are associated (or correlated) with Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Procter Gamble i.e., Procter Gamble and Sarthak Metals go up and down completely randomly.

Pair Corralation between Procter Gamble and Sarthak Metals

Assuming the 90 days trading horizon Procter Gamble Health is expected to generate 0.63 times more return on investment than Sarthak Metals. However, Procter Gamble Health is 1.58 times less risky than Sarthak Metals. It trades about 0.06 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about -0.09 per unit of risk. If you would invest  510,158  in Procter Gamble Health on October 21, 2024 and sell it today you would earn a total of  30,947  from holding Procter Gamble Health or generate 6.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Procter Gamble Health  vs.  Sarthak Metals Limited

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -25-20-15-10-50510
JavaScript chart by amCharts 3.21.15PGHL SMLT
       Timeline  
Procter Gamble Health 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble Health are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4,8005,0005,2005,4005,6005,800
Sarthak Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sarthak Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan150160170180190200

Procter Gamble and Sarthak Metals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.71-4.28-2.85-1.410.02391.442.914.385.84 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15PGHL SMLT
       Returns  

Pair Trading with Procter Gamble and Sarthak Metals

The main advantage of trading using opposite Procter Gamble and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Sarthak Metals 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 Sarthak Metals will offset losses from the drop in Sarthak Metals' long position.
The idea behind Procter Gamble Health and Sarthak Metals Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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