Correlation Between Procter Gamble and Amazon
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Amazon Inc, you can compare the effects of market volatilities on Procter Gamble and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Amazon.
Diversification Opportunities for Procter Gamble and Amazon
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and Amazon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Procter Gamble i.e., Procter Gamble and Amazon go up and down completely randomly.
Pair Corralation between Procter Gamble and Amazon
Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the Amazon. But the stock apears to be less risky and, when comparing its historical volatility, Procter Gamble is 1.82 times less risky than Amazon. The stock trades about -0.09 of its potential returns per unit of risk. The Amazon Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,571 in Amazon Inc on June 3, 2025 and sell it today you would earn a total of 2,329 from holding Amazon Inc or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Amazon Inc
Performance |
| Timeline |
| Procter Gamble |
| Amazon Inc |
Procter Gamble and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Amazon
The main advantage of trading using opposite Procter Gamble and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Church Dwight | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Estee Lauder Companies |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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