Correlation Between Procter Gamble and Bluerock Residential

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

Diversification Opportunities for Procter Gamble and Bluerock Residential

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Procter and Bluerock is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Bluerock Residential Growth RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Residential 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 Bluerock Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Residential has no effect on the direction of Procter Gamble i.e., Procter Gamble and Bluerock Residential go up and down completely randomly.

Pair Corralation between Procter Gamble and Bluerock Residential

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 36.45 times less return on investment than Bluerock Residential. But when comparing it to its historical volatility, Procter Gamble is 3.81 times less risky than Bluerock Residential. It trades about 0.01 of its potential returns per unit of risk. Bluerock Residential Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,427  in Bluerock Residential Growth on August 30, 2022 and sell it today you would earn a total of  1,233  from holding Bluerock Residential Growth or generate 86.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy85.14%
ValuesDaily Returns

Procter Gamble  vs.  Bluerock Residential Growth RE

 Performance (%) 
       Timeline  
Procter Gamble 
Procter Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Procter Price Channel

Bluerock Residential 
Bluerock Performance
0 of 100
Over the last 90 days Bluerock Residential Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bluerock Residential is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Procter Gamble and Bluerock Residential Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Bluerock Residential

The main advantage of trading using opposite Procter Gamble and Bluerock Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Bluerock Residential 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 Bluerock Residential will offset losses from the drop in Bluerock Residential's long position.
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The idea behind Procter Gamble and Bluerock Residential Growth 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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