Correlation Between Procter Gamble and Unilever Plc
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By analyzing existing cross correlation between The Procter Gamble and Unilever Plc, you can compare the effects of market volatilities on Procter Gamble and Unilever Plc 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 Unilever Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Unilever Plc.
Diversification Opportunities for Procter Gamble and Unilever Plc
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Unilever is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble and Unilever Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Plc 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 The Procter Gamble are associated (or correlated) with Unilever Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Plc has no effect on the direction of Procter Gamble i.e., Procter Gamble and Unilever Plc go up and down completely randomly.
Pair Corralation between Procter Gamble and Unilever Plc
Assuming the 90 days horizon Procter Gamble is expected to generate 1.07 times less return on investment than Unilever Plc. But when comparing it to its historical volatility, The Procter Gamble is 1.04 times less risky than Unilever Plc. It trades about 0.1 of its potential returns per unit of risk. Unilever Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,260 in Unilever Plc on September 24, 2024 and sell it today you would earn a total of 1,236 from holding Unilever Plc or generate 29.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Procter Gamble vs. Unilever Plc
Performance |
Timeline |
Procter Gamble |
Unilever Plc |
Procter Gamble and Unilever Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Procter Gamble and Unilever Plc
The main advantage of trading using opposite Procter Gamble and Unilever Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Unilever Plc 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 Unilever Plc will offset losses from the drop in Unilever Plc's long position.Procter Gamble vs. LOREAL ADR 15EO | Procter Gamble vs. LOral SA | Procter Gamble vs. LOral SA | Procter Gamble vs. Unilever Plc |
Unilever Plc vs. The Procter Gamble | Unilever Plc vs. LOREAL ADR 15EO | Unilever Plc vs. LOral SA | Unilever Plc vs. LOral SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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