Correlation Between ATT and Bluebird Bio
Can any of the company-specific risk be diversified away by investing in both ATT and Bluebird Bio 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 Bluebird Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Bluebird bio, you can compare the effects of market volatilities on ATT and Bluebird Bio 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 Bluebird Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Bluebird Bio.
Diversification Opportunities for ATT and Bluebird Bio
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and Bluebird is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Bluebird bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebird bio 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 Bluebird Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebird bio has no effect on the direction of ATT i.e., ATT and Bluebird Bio go up and down completely randomly.
Pair Corralation between ATT and Bluebird Bio
Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Bluebird Bio. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 2.5 times less risky than Bluebird Bio. The stock trades about -0.06 of its potential returns per unit of risk. The Bluebird bio is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Bluebird bio on January 8, 2025 and sell it today you would earn a total of 88.00 from holding Bluebird bio or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Bluebird bio
Performance |
| Timeline |
| ATT Inc |
| Bluebird bio |
ATT and Bluebird Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Bluebird Bio
The main advantage of trading using opposite ATT and Bluebird Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Bluebird Bio 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 Bluebird Bio will offset losses from the drop in Bluebird Bio's long position.The idea behind ATT Inc and Bluebird bio 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.| Bluebird Bio vs. Mersana Therapeutics | Bluebird Bio vs. Zentalis Pharmaceuticals Llc | Bluebird Bio vs. Y mAbs Therapeutics | Bluebird Bio vs. Travere Therapeutics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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