Correlation Between Procter Gamble and ProShares Large

Can any of the company-specific risk be diversified away by investing in both Procter Gamble and ProShares Large 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 ProShares Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Procter Gamble and ProShares Large Cap, you can compare the effects of market volatilities on Procter Gamble and ProShares Large 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 ProShares Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and ProShares Large.

Diversification Opportunities for Procter Gamble and ProShares Large

-0.4

Correlation Coefficient

Procter Gamble  ProShares Large

Very good diversification

The 3 months correlation between Procter and ProShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and ProShares Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Large Cap 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 ProShares Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Large Cap has no effect on the direction of Procter Gamble i.e., Procter Gamble and ProShares Large go up and down completely randomly.

Pair Corralation between Procter Gamble and ProShares Large

Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the ProShares Large. In addition to that, Procter Gamble is 1.19 times more volatile than ProShares Large Cap. It trades about -0.04 of its total potential returns per unit of risk. ProShares Large Cap is currently generating about 0.27 per unit of volatility. If you would invest  6,315  in ProShares Large Cap on April 30, 2025 and sell it today you would earn a total of  894.00  from holding ProShares Large Cap or generate 14.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Procter Gamble  vs.  ProShares Large Cap

Procter Gamble

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procter Gamble has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ProShares Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Large Cap are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, ProShares Large displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Procter Gamble and ProShares Large

The main advantage of trading using opposite Procter Gamble and ProShares Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, ProShares Large 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 ProShares Large will offset losses from the drop in ProShares Large's long position.

The idea behind Procter Gamble and ProShares Large Cap 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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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.