Correlation Between Procter Gamble and Avon Products
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Avon Products 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 Avon Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Avon Products, you can compare the effects of market volatilities on Procter Gamble and Avon Products 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 Avon Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Avon Products.
Diversification Opportunities for Procter Gamble and Avon Products
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Procter and Avon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Avon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avon Products 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 Avon Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avon Products has no effect on the direction of Procter Gamble i.e., Procter Gamble and Avon Products go up and down completely randomly.
Pair Corralation between Procter Gamble and Avon Products
If you would invest (100.00) in Avon Products on January 19, 2024 and sell it today you would earn a total of 100.00 from holding Avon Products or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Procter Gamble vs. Avon Products
Performance |
| Timeline |
| Procter Gamble |
| Avon Products |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Procter Gamble and Avon Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Avon Products
The main advantage of trading using opposite Procter Gamble and Avon Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Avon Products 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 Avon Products will offset losses from the drop in Avon Products' long position.| Procter Gamble vs. The Clorox | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight |
| Avon Products vs. Postal Realty Trust | Avon Products vs. Keurig Dr Pepper | Avon Products vs. Affinity Beverage Group | Avon Products vs. JBG SMITH Properties |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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