Correlation Between ATT and Columbia Integrated
Can any of the company-specific risk be diversified away by investing in both ATT and Columbia Integrated 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 Columbia Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Columbia Integrated Large, you can compare the effects of market volatilities on ATT and Columbia Integrated 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 Columbia Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Columbia Integrated.
Diversification Opportunities for ATT and Columbia Integrated
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Columbia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Columbia Integrated Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Large 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 Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Large has no effect on the direction of ATT i.e., ATT and Columbia Integrated go up and down completely randomly.
Pair Corralation between ATT and Columbia Integrated
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.72 times more return on investment than Columbia Integrated. However, ATT is 1.72 times more volatile than Columbia Integrated Large. It trades about 0.05 of its potential returns per unit of risk. Columbia Integrated Large is currently generating about 0.08 per unit of risk. If you would invest 1,625 in ATT Inc on September 20, 2024 and sell it today you would earn a total of 623.00 from holding ATT Inc or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.28% |
| Values | Daily Returns |
ATT Inc vs. Columbia Integrated Large
Performance |
| Timeline |
| ATT Inc |
| Columbia Integrated Large |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATT and Columbia Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Columbia Integrated
The main advantage of trading using opposite ATT and Columbia Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Columbia Integrated 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 Columbia Integrated will offset losses from the drop in Columbia Integrated's long position.The idea behind ATT Inc and Columbia Integrated Large 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.| Columbia Integrated vs. Goldman Sachs Inflation | Columbia Integrated vs. Ab Bond Inflation | Columbia Integrated vs. Altegris Futures Evolution | Columbia Integrated vs. American Funds Inflation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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