Correlation Between ATT and Bonterra Energy
Can any of the company-specific risk be diversified away by investing in both ATT and Bonterra Energy 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 Bonterra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Bonterra Energy Corp, you can compare the effects of market volatilities on ATT and Bonterra Energy 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 Bonterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Bonterra Energy.
Diversification Opportunities for ATT and Bonterra Energy
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and Bonterra is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Bonterra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Energy Corp 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 Bonterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Energy Corp has no effect on the direction of ATT i.e., ATT and Bonterra Energy go up and down completely randomly.
Pair Corralation between ATT and Bonterra Energy
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.34 times more return on investment than Bonterra Energy. However, ATT Inc is 2.9 times less risky than Bonterra Energy. It trades about 0.24 of its potential returns per unit of risk. Bonterra Energy Corp is currently generating about -0.03 per unit of risk. If you would invest 2,202 in ATT Inc on August 31, 2024 and sell it today you would earn a total of 125.00 from holding ATT Inc or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Bonterra Energy Corp
Performance |
| Timeline |
| ATT Inc |
| Bonterra Energy Corp |
ATT and Bonterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Bonterra Energy
The main advantage of trading using opposite ATT and Bonterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Bonterra Energy 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 Bonterra Energy will offset losses from the drop in Bonterra Energy's long position.| ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group | ATT vs. Morningstar Unconstrained Allocation |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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