Correlation Between StrikePoint Gold and ATT
Can any of the company-specific risk be diversified away by investing in both StrikePoint Gold 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 StrikePoint Gold and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StrikePoint Gold and ATT Inc, you can compare the effects of market volatilities on StrikePoint Gold 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 StrikePoint Gold with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of StrikePoint Gold and ATT.
Diversification Opportunities for StrikePoint Gold and ATT
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between StrikePoint and ATT is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding StrikePoint Gold and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and StrikePoint Gold 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 StrikePoint Gold 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 StrikePoint Gold i.e., StrikePoint Gold and ATT go up and down completely randomly.
Pair Corralation between StrikePoint Gold and ATT
Assuming the 90 days horizon StrikePoint Gold is expected to under-perform the ATT. In addition to that, StrikePoint Gold is 10.32 times more volatile than ATT Inc. It trades about -0.15 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 2,254 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 62.00 from holding ATT Inc or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StrikePoint Gold vs. ATT Inc
Performance |
| Timeline |
| StrikePoint Gold |
| ATT Inc |
StrikePoint Gold and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StrikePoint Gold and ATT
The main advantage of trading using opposite StrikePoint Gold and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StrikePoint Gold 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.| StrikePoint Gold vs. ATT Inc | StrikePoint Gold vs. Merck Company | StrikePoint Gold vs. Walt Disney | StrikePoint Gold vs. Caterpillar |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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