Correlation Between ATT and InBankshares Corp
Can any of the company-specific risk be diversified away by investing in both ATT and InBankshares Corp 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 InBankshares Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and InBankshares Corp, you can compare the effects of market volatilities on ATT and InBankshares Corp 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 InBankshares Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and InBankshares Corp.
Diversification Opportunities for ATT and InBankshares Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and InBankshares is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and InBankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InBankshares 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 InBankshares Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InBankshares Corp has no effect on the direction of ATT i.e., ATT and InBankshares Corp go up and down completely randomly.
Pair Corralation between ATT and InBankshares Corp
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.47 times more return on investment than InBankshares Corp. However, ATT is 1.47 times more volatile than InBankshares Corp. It trades about 0.05 of its potential returns per unit of risk. InBankshares Corp is currently generating about 0.01 per unit of risk. If you would invest 1,688 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 582.00 from holding ATT Inc or generate 34.48% 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. InBankshares Corp
Performance |
| Timeline |
| ATT Inc |
| InBankshares Corp |
ATT and InBankshares Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and InBankshares Corp
The main advantage of trading using opposite ATT and InBankshares Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, InBankshares Corp 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 InBankshares Corp will offset losses from the drop in InBankshares Corp's long position.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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