Correlation Between PB Fintech and Procter Gamble

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

By analyzing existing cross correlation between PB Fintech Limited and Procter Gamble Health, you can compare the effects of market volatilities on PB Fintech and Procter Gamble 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 PB Fintech with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of PB Fintech and Procter Gamble.

Diversification Opportunities for PB Fintech and Procter Gamble

0.58

Correlation Coefficient

PB Fintech  Procter Gamble

Very weak diversification

The 3 months correlation between POLICYBZR and Procter is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PB Fintech Limited and Procter Gamble Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble Health and PB Fintech 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 PB Fintech Limited are associated (or correlated) with Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble Health has no effect on the direction of PB Fintech i.e., PB Fintech and Procter Gamble go up and down completely randomly.

Pair Corralation between PB Fintech and Procter Gamble

Assuming the 90 days trading horizon PB Fintech Limited is expected to generate 1.88 times more return on investment than Procter Gamble. However, PB Fintech is 1.88 times more volatile than Procter Gamble Health. It trades about 0.14 of its potential returns per unit of risk. Procter Gamble Health is currently generating about 0.04 per unit of risk. If you would invest  59,715  in PB Fintech Limited on September 25, 2024 and sell it today you would earn a total of  151,925  from holding PB Fintech Limited or generate 254.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.51%
Values	Daily Returns

PB Fintech Limited  vs.  Procter Gamble Health

PB Fintech Limited

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PB Fintech Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, PB Fintech sustained solid returns over the last few months and may actually be approaching a breakup point.

Procter Gamble Health

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Procter Gamble is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PB Fintech and Procter Gamble

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

The idea behind PB Fintech Limited and Procter Gamble Health 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.