Correlation Between Consolidated Communications and ATT
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By analyzing existing cross correlation between Consolidated Communications Holdings and ATT Inc, you can compare the effects of market volatilities on Consolidated Communications 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 Consolidated Communications with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and ATT.
Diversification Opportunities for Consolidated Communications and ATT
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Consolidated and ATT is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Consolidated Communications 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 Consolidated Communications Holdings 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 Consolidated Communications i.e., Consolidated Communications and ATT go up and down completely randomly.
Pair Corralation between Consolidated Communications and ATT
Assuming the 90 days horizon Consolidated Communications is expected to generate 1.22 times less return on investment than ATT. In addition to that, Consolidated Communications is 2.01 times more volatile than ATT Inc. It trades about 0.02 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of volatility. If you would invest 1,582 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 614.00 from holding ATT Inc or generate 38.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. ATT Inc
Performance |
| Timeline |
| Consolidated Communications |
| ATT Inc |
Consolidated Communications and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and ATT
The main advantage of trading using opposite Consolidated Communications and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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.The idea behind Consolidated Communications Holdings and ATT Inc 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.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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