Correlation Between ATT and Procaps Group
Can any of the company-specific risk be diversified away by investing in both ATT and Procaps Group 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 Procaps Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Procaps Group SA, you can compare the effects of market volatilities on ATT and Procaps Group 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 Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Procaps Group.
Diversification Opportunities for ATT and Procaps Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and Procaps is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA 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 Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of ATT i.e., ATT and Procaps Group go up and down completely randomly.
Pair Corralation between ATT and Procaps Group
Taking into account the 90-day investment horizon ATT is expected to generate 2.39 times less return on investment than Procaps Group. But when comparing it to its historical volatility, ATT Inc is 23.3 times less risky than Procaps Group. It trades about 0.19 of its potential returns per unit of risk. Procaps Group SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Procaps Group SA on August 27, 2024 and sell it today you would lose (62.00) from holding Procaps Group SA or give up 32.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Procaps Group SA
Performance |
| Timeline |
| ATT Inc |
| Procaps Group SA |
ATT and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Procaps Group
The main advantage of trading using opposite ATT and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group's long position.The idea behind ATT Inc and Procaps Group SA 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.| Procaps Group vs. Phibro Animal Health | Procaps Group vs. Delta 9 Cannabis | Procaps Group vs. City View Green | Procaps Group vs. Benchmark Botanics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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