Correlation Between Cable One and ATT
Can any of the company-specific risk be diversified away by investing in both Cable One and ATT 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 Cable One and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and ATT Inc, you can compare the effects of market volatilities on Cable One and ATT 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 Cable One with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and ATT.
Diversification Opportunities for Cable One and ATT
Poor diversification
The 3 months correlation between Cable and ATT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Cable One 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 Cable One are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Cable One i.e., Cable One and ATT go up and down completely randomly.
Pair Corralation between Cable One and ATT
Assuming the 90 days trading horizon Cable One is expected to generate 1.48 times more return on investment than ATT. However, Cable One is 1.48 times more volatile than ATT Inc. It trades about 0.15 of its potential returns per unit of risk. ATT Inc is currently generating about 0.21 per unit of risk. If you would invest 1,004 in Cable One on August 29, 2024 and sell it today you would earn a total of 220.00 from holding Cable One or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. ATT Inc
Performance |
| Timeline |
| Cable One |
| ATT Inc |
Cable One and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and ATT
The main advantage of trading using opposite Cable One and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Cable One vs. G2D Investments | Cable One vs. Metalrgica Riosulense SA | Cable One vs. NXP Semiconductors NV | Cable One vs. Waste Management |
| ATT vs. Cognizant Technology Solutions | ATT vs. Take Two Interactive Software | ATT vs. Paycom Software | ATT vs. Agilent Technologies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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