Correlation Between Silgo Retail and Procter Gamble

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

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

Diversification Opportunities for Silgo Retail and Procter Gamble

-0.09

Correlation Coefficient

Silgo Retail  Procter Gamble

Good diversification

The 3 months correlation between Silgo and Procter is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail 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 Silgo Retail 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 Silgo Retail 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 Silgo Retail i.e., Silgo Retail and Procter Gamble go up and down completely randomly.

Pair Corralation between Silgo Retail and Procter Gamble

Assuming the 90 days trading horizon Silgo Retail Limited is expected to under-perform the Procter Gamble. In addition to that, Silgo Retail is 2.17 times more volatile than Procter Gamble Health. It trades about -0.05 of its total potential returns per unit of risk. Procter Gamble Health is currently generating about -0.02 per unit of volatility. If you would invest  527,016  in Procter Gamble Health on October 8, 2024 and sell it today you would lose (18,846) from holding Procter Gamble Health or give up 3.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Silgo Retail Limited  vs.  Procter Gamble Health

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Procter Gamble Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procter Gamble Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Procter Gamble is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Silgo Retail and Procter Gamble

The main advantage of trading using opposite Silgo Retail and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silgo Retail 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 Silgo Retail 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.