Correlation Between Procter Gamble and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and WisdomTree China 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 WisdomTree China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and WisdomTree China ex State Owned, you can compare the effects of market volatilities on Procter Gamble and WisdomTree China 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 WisdomTree China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and WisdomTree China.
Diversification Opportunities for Procter Gamble and WisdomTree China
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and WisdomTree is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China 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 WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of Procter Gamble i.e., Procter Gamble and WisdomTree China go up and down completely randomly.
Pair Corralation between Procter Gamble and WisdomTree China
Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the WisdomTree China. But the stock apears to be less risky and, when comparing its historical volatility, Procter Gamble is 1.2 times less risky than WisdomTree China. The stock trades about -0.07 of its potential returns per unit of risk. The WisdomTree China ex State Owned is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,315 in WisdomTree China ex State Owned on May 4, 2025 and sell it today you would earn a total of 330.00 from holding WisdomTree China ex State Owned or generate 9.95% 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. WisdomTree China ex State Owne
Performance |
Timeline |
Procter Gamble |
WisdomTree China |
Procter Gamble and WisdomTree China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and WisdomTree China
The main advantage of trading using opposite Procter Gamble and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, WisdomTree China 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 WisdomTree China will offset losses from the drop in WisdomTree China's long position.Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
WisdomTree China vs. Global X MSCI | WisdomTree China vs. WisdomTree Emerging Markets | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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