Correlation Between Procter Gamble and Benefytt Technologies

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

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

Diversification Opportunities for Procter Gamble and Benefytt Technologies

0.0

Correlation Coefficient

Procter Gamble  Benefytt Technologies

Pay attention - limited upside

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

Pair Corralation between Procter Gamble and Benefytt Technologies

If you would invest  15,510  in Procter Gamble on February 5, 2024 and sell it today you would earn a total of  936.00  from holding Procter Gamble or generate 6.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Procter Gamble  vs.  Benefytt Technologies

Procter Gamble

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. 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.

Benefytt Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benefytt Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Benefytt Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Procter Gamble and Benefytt Technologies

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

The idea behind Procter Gamble and Benefytt Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.