Correlation Between ATT and Korea Closed
Can any of the company-specific risk be diversified away by investing in both ATT and Korea Closed 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 Korea Closed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Korea Closed, you can compare the effects of market volatilities on ATT and Korea Closed 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 Korea Closed. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Korea Closed.
Diversification Opportunities for ATT and Korea Closed
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and Korea is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Korea Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Closed 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 Korea Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Closed has no effect on the direction of ATT i.e., ATT and Korea Closed go up and down completely randomly.
Pair Corralation between ATT and Korea Closed
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.75 times more return on investment than Korea Closed. However, ATT Inc is 1.34 times less risky than Korea Closed. It trades about 0.2 of its potential returns per unit of risk. Korea Closed is currently generating about -0.17 per unit of risk. If you would invest 2,218 in ATT Inc on August 30, 2024 and sell it today you would earn a total of 109.00 from holding ATT Inc or generate 4.91% 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. Korea Closed
Performance |
| Timeline |
| ATT Inc |
| Korea Closed |
ATT and Korea Closed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Korea Closed
The main advantage of trading using opposite ATT and Korea Closed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Korea Closed 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 Korea Closed will offset losses from the drop in Korea Closed's long position.The idea behind ATT Inc and Korea Closed 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.| Korea Closed vs. Aberdeen Asia Pacific If | Korea Closed vs. Aberdeen Japan Equity | Korea Closed vs. Stone Harbor Emerging | Korea Closed vs. Tortoise Pipeline And |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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