Correlation Between ATT and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both ATT and Abbey Capital 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 Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Abbey Capital Futures, you can compare the effects of market volatilities on ATT and Abbey Capital 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 Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Abbey Capital.
Diversification Opportunities for ATT and Abbey Capital
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and Abbey is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures 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 Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of ATT i.e., ATT and Abbey Capital go up and down completely randomly.
Pair Corralation between ATT and Abbey Capital
Taking into account the 90-day investment horizon ATT Inc is expected to generate 5.52 times more return on investment than Abbey Capital. However, ATT is 5.52 times more volatile than Abbey Capital Futures. It trades about -0.03 of its potential returns per unit of risk. Abbey Capital Futures is currently generating about -0.37 per unit of risk. If you would invest 2,712 in ATT Inc on January 6, 2025 and sell it today you would lose (48.00) from holding ATT Inc or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Abbey Capital Futures
Performance |
| Timeline |
| ATT Inc |
| Abbey Capital Futures |
ATT and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Abbey Capital
The main advantage of trading using opposite ATT and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.The idea behind ATT Inc and Abbey Capital Futures 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.| Abbey Capital vs. Rbb Fund | Abbey Capital vs. Fwnhtx | Abbey Capital vs. Tax Managed International Equity | Abbey Capital vs. Materials Portfolio Fidelity |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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