Correlation Between Procter Gamble and United Parcel
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and United Parcel 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 United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and United Parcel Service, you can compare the effects of market volatilities on Procter Gamble and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and United Parcel.
Diversification Opportunities for Procter Gamble and United Parcel
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and United is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Procter Gamble i.e., Procter Gamble and United Parcel go up and down completely randomly.
Pair Corralation between Procter Gamble and United Parcel
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.36 times more return on investment than United Parcel. However, Procter Gamble is 2.76 times less risky than United Parcel. It trades about -0.17 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.14 per unit of risk. If you would invest 16,183 in Procter Gamble on January 19, 2024 and sell it today you would lose (487.00) from holding Procter Gamble or give up 3.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Procter Gamble vs. United Parcel Service
Performance |
Timeline |
Procter Gamble |
United Parcel Service |
Procter Gamble and United Parcel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and United Parcel
The main advantage of trading using opposite Procter Gamble and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |