Correlation Between ATT and PGIM Ultra
Can any of the company-specific risk be diversified away by investing in both ATT and PGIM Ultra 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 PGIM Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and PGIM Ultra Short, you can compare the effects of market volatilities on ATT and PGIM Ultra 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 PGIM Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and PGIM Ultra.
Diversification Opportunities for ATT and PGIM Ultra
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ATT and PGIM is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and PGIM Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Ultra Short 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 PGIM Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Ultra Short has no effect on the direction of ATT i.e., ATT and PGIM Ultra go up and down completely randomly.
Pair Corralation between ATT and PGIM Ultra
Taking into account the 90-day investment horizon ATT Inc is expected to generate 37.46 times more return on investment than PGIM Ultra. However, ATT is 37.46 times more volatile than PGIM Ultra Short. It trades about 0.13 of its potential returns per unit of risk. PGIM Ultra Short is currently generating about 0.73 per unit of risk. If you would invest 1,561 in ATT Inc on August 26, 2024 and sell it today you would earn a total of 757.00 from holding ATT Inc or generate 48.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. PGIM Ultra Short
Performance |
| Timeline |
| ATT Inc |
| PGIM Ultra Short |
ATT and PGIM Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and PGIM Ultra
The main advantage of trading using opposite ATT and PGIM Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, PGIM Ultra 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 PGIM Ultra will offset losses from the drop in PGIM Ultra's long position.| ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications | ATT vs. Liberty Broadband Srs | ATT vs. Shenandoah Telecommunications Co |
| PGIM Ultra vs. First Trust Low | PGIM Ultra vs. First Trust Senior | PGIM Ultra vs. First Trust TCW | PGIM Ultra vs. First Trust Tactical |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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