Correlation Between ATT and Asia Broadband
Can any of the company-specific risk be diversified away by investing in both ATT and Asia Broadband 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 Asia Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Asia Broadband, you can compare the effects of market volatilities on ATT and Asia Broadband 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 Asia Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Asia Broadband.
Diversification Opportunities for ATT and Asia Broadband
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and Asia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Asia Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Broadband 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 Asia Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Broadband has no effect on the direction of ATT i.e., ATT and Asia Broadband go up and down completely randomly.
Pair Corralation between ATT and Asia Broadband
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.25 times more return on investment than Asia Broadband. However, ATT Inc is 4.04 times less risky than Asia Broadband. It trades about 0.05 of its potential returns per unit of risk. Asia Broadband is currently generating about 0.01 per unit of risk. If you would invest 1,688 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 628.00 from holding ATT Inc or generate 37.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ATT Inc vs. Asia Broadband
Performance |
| Timeline |
| ATT Inc |
| Asia Broadband |
ATT and Asia Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Asia Broadband
The main advantage of trading using opposite ATT and Asia Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Asia Broadband 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 Asia Broadband will offset losses from the drop in Asia Broadband's long position.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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