Correlation Between Procter Gamble and Etsy

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

Diversification Opportunities for Procter Gamble and Etsy

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Procter and Etsy is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Procter Gamble i.e., Procter Gamble and Etsy go up and down completely randomly.

Pair Corralation between Procter Gamble and Etsy

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.33 times more return on investment than Etsy. However, Procter Gamble is 3.05 times less risky than Etsy. It trades about -0.21 of its potential returns per unit of risk. Etsy Inc is currently generating about -0.1 per unit of risk. If you would invest  14,229  in Procter Gamble on June 27, 2022 and sell it today you would lose (671.00)  from holding Procter Gamble or give up 4.72% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Procter Gamble  vs.  Etsy 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

Etsy Inc 
Etsy Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Etsy showed solid returns over the last few months and may actually be approaching a breakup point.

Etsy Price Channel

Procter Gamble and Etsy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Etsy

The main advantage of trading using opposite Procter Gamble and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.
Procter Gamble vs. Sigma Lithium Corp
The idea behind Procter Gamble and Etsy 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.
Etsy 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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