Correlation Between Access Capital and Prudential California
Can any of the company-specific risk be diversified away by investing in both Access Capital and Prudential California 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 Access Capital and Prudential California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Capital Munity and Prudential California Muni, you can compare the effects of market volatilities on Access Capital and Prudential California 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 Access Capital with a short position of Prudential California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Capital and Prudential California.
Diversification Opportunities for Access Capital and Prudential California
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Access and Prudential is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Access Capital Munity and Prudential California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential California and Access Capital 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 Access Capital Munity are associated (or correlated) with Prudential California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential California has no effect on the direction of Access Capital i.e., Access Capital and Prudential California go up and down completely randomly.
Pair Corralation between Access Capital and Prudential California
Assuming the 90 days horizon Access Capital Munity is expected to generate 3.59 times more return on investment than Prudential California. However, Access Capital is 3.59 times more volatile than Prudential California Muni. It trades about 0.36 of its potential returns per unit of risk. Prudential California Muni is currently generating about 0.33 per unit of risk. If you would invest 754.00 in Access Capital Munity on April 8, 2025 and sell it today you would earn a total of 12.00 from holding Access Capital Munity or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Capital Munity vs. Prudential California Muni
Performance |
| Timeline |
| Access Capital Munity |
| Prudential California |
Access Capital and Prudential California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Capital and Prudential California
The main advantage of trading using opposite Access Capital and Prudential California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Capital position performs unexpectedly, Prudential California 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 Prudential California will offset losses from the drop in Prudential California's long position.| Access Capital vs. Dana Large Cap | Access Capital vs. Large Cap Growth Profund | Access Capital vs. Dunham Large Cap | Access Capital vs. Aqr Large Cap |
| Prudential California vs. Ab Bond Inflation | Prudential California vs. Simt Multi Asset Inflation | Prudential California vs. Ab Bond Inflation | Prudential California vs. Inflation Adjusted Bond Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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