Correlation Between Procter Gamble and AB VIRGINIA

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Can any of the company-specific risk be diversified away by investing in both Procter Gamble and AB VIRGINIA 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 AB VIRGINIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and AB VIRGINIA PORTFOLIO, you can compare the effects of market volatilities on Procter Gamble and AB VIRGINIA 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 AB VIRGINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and AB VIRGINIA.

Diversification Opportunities for Procter Gamble and AB VIRGINIA

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Procter and AVAAX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and AB VIRGINIA PORTFOLIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB VIRGINIA PORTFOLIO 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 Procter Gamble are associated (or correlated) with AB VIRGINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB VIRGINIA PORTFOLIO has no effect on the direction of Procter Gamble i.e., Procter Gamble and AB VIRGINIA go up and down completely randomly.

Pair Corralation between Procter Gamble and AB VIRGINIA

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.57 times more return on investment than AB VIRGINIA. However, Procter Gamble is 3.57 times more volatile than AB VIRGINIA PORTFOLIO. It trades about 0.41 of its potential returns per unit of risk. AB VIRGINIA PORTFOLIO is currently generating about 0.6 per unit of risk. If you would invest  13,488  in Procter Gamble on September 2, 2022 and sell it today you would earn a total of  1,428  from holding Procter Gamble or generate 10.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Procter Gamble  vs.  AB VIRGINIA PORTFOLIO

 Performance (%) 
       Timeline  
Procter Gamble 
Procter Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Procter Price Channel

AB VIRGINIA PORTFOLIO 
AVAAX Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AB VIRGINIA PORTFOLIO are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, AB VIRGINIA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AVAAX Price Channel

Procter Gamble and AB VIRGINIA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and AB VIRGINIA

The main advantage of trading using opposite Procter Gamble and AB VIRGINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, AB VIRGINIA 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 AB VIRGINIA will offset losses from the drop in AB VIRGINIA's long position.
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The idea behind Procter Gamble and AB VIRGINIA PORTFOLIO 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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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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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