Correlation Between ATT and Centre Global
Can any of the company-specific risk be diversified away by investing in both ATT and Centre Global 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 Centre Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Centre Global Infrastructure, you can compare the effects of market volatilities on ATT and Centre Global 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 Centre Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Centre Global.
Diversification Opportunities for ATT and Centre Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Centre is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Centre Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre Global Infras 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 Centre Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre Global Infras has no effect on the direction of ATT i.e., ATT and Centre Global go up and down completely randomly.
Pair Corralation between ATT and Centre Global
Taking into account the 90-day investment horizon ATT Inc is expected to generate 2.1 times more return on investment than Centre Global. However, ATT is 2.1 times more volatile than Centre Global Infrastructure. It trades about 0.17 of its potential returns per unit of risk. Centre Global Infrastructure is currently generating about 0.0 per unit of risk. If you would invest 2,126 in ATT Inc on September 13, 2024 and sell it today you would earn a total of 224.00 from holding ATT Inc or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
ATT Inc vs. Centre Global Infrastructure
Performance |
| Timeline |
| ATT Inc |
| Centre Global Infras |
ATT and Centre Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Centre Global
The main advantage of trading using opposite ATT and Centre Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Centre Global 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 Centre Global will offset losses from the drop in Centre Global's long position.The idea behind ATT Inc and Centre Global Infrastructure 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.| Centre Global vs. Blackrock Conservative Prprdptfinstttnl | Centre Global vs. Allianzgi Diversified Income | Centre Global vs. Elfun Diversified Fund | Centre Global vs. Stone Ridge Diversified |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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