Correlation Between Procter Gamble and ZINZINO AB

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

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

Diversification Opportunities for Procter Gamble and ZINZINO AB

0.4

Correlation Coefficient

Procter Gamble  ZINZINO AB

Very weak diversification

The 3 months correlation between Procter and ZINZINO is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B 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 The Procter Gamble are associated (or correlated) with ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of Procter Gamble i.e., Procter Gamble and ZINZINO AB go up and down completely randomly.

Pair Corralation between Procter Gamble and ZINZINO AB

Assuming the 90 days horizon The Procter Gamble is expected to under-perform the ZINZINO AB. But the stock apears to be less risky and, when comparing its historical volatility, The Procter Gamble is 2.79 times less risky than ZINZINO AB. The stock trades about -0.03 of its potential returns per unit of risk. The ZINZINO AB B is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  728.00  in ZINZINO AB B on December 21, 2024 and sell it today you would earn a total of  658.00  from holding ZINZINO AB B or generate 90.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

The Procter Gamble  vs.  ZINZINO AB B

Procter Gamble

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Procter Gamble has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Procter Gamble is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ZINZINO AB B

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ZINZINO AB B are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZINZINO AB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Procter Gamble and ZINZINO AB

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

The idea behind The Procter Gamble and ZINZINO AB B 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.