Correlation Between Joy Global and Procter Gamble

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Can any of the company-specific risk be diversified away by investing in both Joy Global and Procter Gamble 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 Joy Global and Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joy Global and Procter Gamble, you can compare the effects of market volatilities on Joy Global and Procter Gamble 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 Joy Global with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joy Global and Procter Gamble.

Diversification Opportunities for Joy Global and Procter Gamble

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Joy and Procter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Joy Global and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble and Joy Global 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 Joy Global are associated (or correlated) with Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Joy Global i.e., Joy Global and Procter Gamble go up and down completely randomly.

Pair Corralation between Joy Global and Procter Gamble

If you would invest  15,930  in Procter Gamble on December 29, 2023 and sell it today you would earn a total of  331.00  from holding Procter Gamble or generate 2.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Joy Global  vs.  Procter Gamble

 Performance 
       Timeline  
Joy Global 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Joy Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Joy Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Procter Gamble 

Risk-Adjusted Performance

17 of 100

 
Low
 
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Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Joy Global and Procter Gamble Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Joy Global and Procter Gamble

The main advantage of trading using opposite Joy Global and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joy Global position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.
The idea behind Joy Global and Procter Gamble 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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