Correlation Between Max Financial and Procter Gamble

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

By analyzing existing cross correlation between Max Financial Services and Procter Gamble Health, you can compare the effects of market volatilities on Max Financial 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 Max Financial with a short position of Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and Procter Gamble.

Diversification Opportunities for Max Financial and Procter Gamble

0.94

Correlation Coefficient

Max Financial  Procter Gamble

Almost no diversification

The 3 months correlation between Max and Procter is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and Procter Gamble Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble Health and Max Financial 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 Max Financial Services 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 Health has no effect on the direction of Max Financial i.e., Max Financial and Procter Gamble go up and down completely randomly.

Pair Corralation between Max Financial and Procter Gamble

Assuming the 90 days trading horizon Max Financial Services is expected to generate 1.06 times more return on investment than Procter Gamble. However, Max Financial is 1.06 times more volatile than Procter Gamble Health. It trades about 0.28 of its potential returns per unit of risk. Procter Gamble Health is currently generating about 0.16 per unit of risk. If you would invest  123,740  in Max Financial Services on April 20, 2025 and sell it today you would earn a total of  30,170  from holding Max Financial Services or generate 24.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Max Financial Services  vs.  Procter Gamble Health

Max Financial Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Max Financial Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Max Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Procter Gamble Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble Health are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Max Financial and Procter Gamble

The main advantage of trading using opposite Max Financial and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial 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 Max Financial Services and Procter Gamble Health 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.