Correlation Between ATT and InterDigital
Can any of the company-specific risk be diversified away by investing in both ATT and InterDigital 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 ATT and InterDigital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and InterDigital, you can compare the effects of market volatilities on ATT and InterDigital 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 ATT with a short position of InterDigital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and InterDigital.
Diversification Opportunities for ATT and InterDigital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and InterDigital is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and InterDigital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterDigital and ATT 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 ATT Inc are associated (or correlated) with InterDigital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterDigital has no effect on the direction of ATT i.e., ATT and InterDigital go up and down completely randomly.
Pair Corralation between ATT and InterDigital
Given the investment horizon of 90 days ATT Inc is expected to under-perform the InterDigital. But the preferred stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 2.58 times less risky than InterDigital. The preferred stock trades about -0.07 of its potential returns per unit of risk. The InterDigital is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 14,119 in InterDigital on August 31, 2024 and sell it today you would earn a total of 5,674 from holding InterDigital or generate 40.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
ATT Inc vs. InterDigital
Performance |
| Timeline |
| ATT Inc |
| InterDigital |
ATT and InterDigital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and InterDigital
The main advantage of trading using opposite ATT and InterDigital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, InterDigital 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 InterDigital will offset losses from the drop in InterDigital's long position.| ATT vs. Telephone and Data | ATT vs. Telephone and Data | ATT vs. Palantir Technologies Class | ATT vs. Walmart |
| InterDigital vs. KT Corporation | InterDigital vs. Cable One | InterDigital vs. Ooma Inc | InterDigital vs. Liberty Broadband Srs |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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