Correlation Between GP Investments and ATT
Can any of the company-specific risk be diversified away by investing in both GP Investments 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 GP Investments and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and ATT Inc, you can compare the effects of market volatilities on GP Investments 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 GP Investments with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and ATT.
Diversification Opportunities for GP Investments and ATT
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and ATT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and GP Investments 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 GP Investments 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 GP Investments i.e., GP Investments and ATT go up and down completely randomly.
Pair Corralation between GP Investments and ATT
Assuming the 90 days trading horizon GP Investments is expected to generate 1.77 times more return on investment than ATT. However, GP Investments is 1.77 times more volatile than ATT Inc. It trades about 0.04 of its potential returns per unit of risk. ATT Inc is currently generating about 0.06 per unit of risk. If you would invest 290.00 in GP Investments on August 25, 2024 and sell it today you would earn a total of 108.00 from holding GP Investments or generate 37.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. ATT Inc
Performance |
| Timeline |
| GP Investments |
| ATT Inc |
GP Investments and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and ATT
The main advantage of trading using opposite GP Investments and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments 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.| GP Investments vs. Ameriprise Financial | GP Investments vs. Fras le SA | GP Investments vs. Clave Indices De | GP Investments vs. BTG Pactual Logstica |
| ATT vs. American Airlines Group | ATT vs. Brpr Corporate Offices | ATT vs. Taiwan Semiconductor Manufacturing | ATT vs. Sumitomo Mitsui Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |