Correlation Between 26442CAB0 and Procter Gamble

Can any of the company-specific risk be diversified away by investing in both 26442CAB0 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 26442CAB0 and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and Procter Gamble, you can compare the effects of market volatilities on 26442CAB0 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 26442CAB0 with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAB0 and Procter Gamble.

Diversification Opportunities for 26442CAB0 and Procter Gamble

0.31

Correlation Coefficient

26442CAB0  Procter Gamble

Weak diversification

The 3 months correlation between 26442CAB0 and Procter is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and 26442CAB0 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 DUKE ENERGY CAROLINAS 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 26442CAB0 i.e., 26442CAB0 and Procter Gamble go up and down completely randomly.

Pair Corralation between 26442CAB0 and Procter Gamble

Assuming the 90 days trading horizon DUKE ENERGY CAROLINAS is expected to generate 0.95 times more return on investment than Procter Gamble. However, DUKE ENERGY CAROLINAS is 1.06 times less risky than Procter Gamble. It trades about 0.02 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.0 per unit of risk. If you would invest  10,420  in DUKE ENERGY CAROLINAS on December 24, 2024 and sell it today you would earn a total of  107.00  from holding DUKE ENERGY CAROLINAS or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.69%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  Procter Gamble

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442CAB0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Procter Gamble

Risk-Adjusted Performance

Very Weak

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

Pair Trading with 26442CAB0 and Procter Gamble

The main advantage of trading using opposite 26442CAB0 and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAB0 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 DUKE ENERGY CAROLINAS 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.