Correlation Between CHINA EDUCATION and ATT
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and ATT Inc, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and ATT.
Diversification Opportunities for CHINA EDUCATION and ATT
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and ATT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and ATT go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and ATT
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the ATT. In addition to that, CHINA EDUCATION is 2.92 times more volatile than ATT Inc. It trades about -0.01 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.14 per unit of volatility. If you would invest 1,708 in ATT Inc on October 25, 2024 and sell it today you would earn a total of 431.00 from holding ATT Inc or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. ATT Inc
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| ATT Inc |
CHINA EDUCATION and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and ATT
The main advantage of trading using opposite CHINA EDUCATION and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Nexstar Media Group | CHINA EDUCATION vs. Universal Entertainment | CHINA EDUCATION vs. Ares Management Corp | CHINA EDUCATION vs. RCS MediaGroup SpA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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