Correlation Between ATT and Luduson G
Can any of the company-specific risk be diversified away by investing in both ATT and Luduson G 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 ATT and Luduson G into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Luduson G, you can compare the effects of market volatilities on ATT and Luduson G 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 ATT with a short position of Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Luduson G.
Diversification Opportunities for ATT and Luduson G
Pay attention - limited upside
The 3 months correlation between ATT and Luduson is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G and ATT 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 ATT Inc are associated (or correlated) with Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of ATT i.e., ATT and Luduson G go up and down completely randomly.
Pair Corralation between ATT and Luduson G
Taking into account the 90-day investment horizon ATT is expected to generate 26.99 times less return on investment than Luduson G. But when comparing it to its historical volatility, ATT Inc is 51.71 times less risky than Luduson G. It trades about 0.18 of its potential returns per unit of risk. Luduson G is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.30 in Luduson G on September 1, 2024 and sell it today you would lose (1.84) from holding Luduson G or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Luduson G
Performance |
| Timeline |
| ATT Inc |
| Luduson G |
ATT and Luduson G Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Luduson G
The main advantage of trading using opposite ATT and Luduson G positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Luduson G 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 Luduson G will offset losses from the drop in Luduson G's long position.The idea behind ATT Inc and Luduson G 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.| Luduson G vs. East Africa Metals | Luduson G vs. AMCON Distributing | Luduson G vs. FitLife Brands, Common | Luduson G vs. Paiute Oil Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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