Correlation Between Procter Gamble and SPDR Barclays

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

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

Diversification Opportunities for Procter Gamble and SPDR Barclays

-0.51

Correlation Coefficient

Procter Gamble  SPDR Barclays

Excellent diversification

The 3 months correlation between Procter and SPDR is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and SPDR Barclays Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Interm 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Interm has no effect on the direction of Procter Gamble i.e., Procter Gamble and SPDR Barclays go up and down completely randomly.

Pair Corralation between Procter Gamble and SPDR Barclays

Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the SPDR Barclays. In addition to that, Procter Gamble is 5.31 times more volatile than SPDR Barclays Intermediate. It trades about -0.07 of its total potential returns per unit of risk. SPDR Barclays Intermediate is currently generating about 0.19 per unit of volatility. If you would invest  3,277  in SPDR Barclays Intermediate on May 3, 2025 and sell it today you would earn a total of  72.00  from holding SPDR Barclays Intermediate or generate 2.2% 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.  SPDR Barclays Intermediate

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.

SPDR Barclays Interm

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Intermediate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Procter Gamble and SPDR Barclays

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

The idea behind Procter Gamble and SPDR Barclays Intermediate 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.