Correlation Between Procter Gamble and Amazon

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

Diversification Opportunities for Procter Gamble and Amazon

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Procter and Amazon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Procter Gamble i.e., Procter Gamble and Amazon go up and down completely randomly.

Pair Corralation between Procter Gamble and Amazon

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.49 times more return on investment than Amazon. However, Procter Gamble is 2.03 times less risky than Amazon. It trades about 0.01 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.02 per unit of risk. If you would invest  13,288  in Procter Gamble on June 27, 2022 and sell it today you would earn a total of  270.00  from holding Procter Gamble or generate 2.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Procter Gamble  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Procter Gamble 
Procter Performance
0 of 100
Over the last 90 days Procter Gamble has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Procter Price Channel

Amazon Inc 
Amazon Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Amazon is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Amazon Price Channel

Procter Gamble and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Amazon

The main advantage of trading using opposite Procter Gamble and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
Procter Gamble vs. Sigma Lithium Corp
The idea behind Procter Gamble and Amazon Inc 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.
Amazon vs. BUSHVELD MINERALS LTD
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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