Correlation Between ATT and BGC Partners
Can any of the company-specific risk be diversified away by investing in both ATT and BGC Partners 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 BGC Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and BGC Partners, you can compare the effects of market volatilities on ATT and BGC Partners 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 BGC Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and BGC Partners.
Diversification Opportunities for ATT and BGC Partners
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and BGC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and BGC Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Partners 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 BGC Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Partners has no effect on the direction of ATT i.e., ATT and BGC Partners go up and down completely randomly.
Pair Corralation between ATT and BGC Partners
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 Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
ATT Inc vs. BGC Partners
Performance |
| Timeline |
| ATT Inc |
| BGC Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATT and BGC Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and BGC Partners
The main advantage of trading using opposite ATT and BGC Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, BGC Partners 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 BGC Partners will offset losses from the drop in BGC Partners' long position.The idea behind ATT Inc and BGC Partners 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.| BGC Partners vs. Newmark Group | BGC Partners vs. Consolidated Communications | BGC Partners vs. Brookline Bancorp | BGC Partners vs. SLR Investment Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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