Correlation Between Summit Environmental and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Summit Environmental 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 Summit Environmental and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Environmental and Procter Gamble, you can compare the effects of market volatilities on Summit Environmental 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 Summit Environmental with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Environmental and Procter Gamble.
Diversification Opportunities for Summit Environmental and Procter Gamble
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Procter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Environmental and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Summit Environmental 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 Summit Environmental 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 has no effect on the direction of Summit Environmental i.e., Summit Environmental and Procter Gamble go up and down completely randomly.
Pair Corralation between Summit Environmental and Procter Gamble
If you would invest 0.01 in Summit Environmental on September 26, 2024 and sell it today you would earn a total of 0.00 from holding Summit Environmental or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Summit Environmental vs. Procter Gamble
Performance |
Timeline |
Summit Environmental |
Procter Gamble |
Summit Environmental and Procter Gamble Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Environmental and Procter Gamble
The main advantage of trading using opposite Summit Environmental and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Environmental 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 Summit Environmental and Procter Gamble 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.Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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