Correlation Between ATT and NuGene International
Can any of the company-specific risk be diversified away by investing in both ATT and NuGene International 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 NuGene International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and NuGene International, you can compare the effects of market volatilities on ATT and NuGene International 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 NuGene International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and NuGene International.
Diversification Opportunities for ATT and NuGene International
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and NuGene is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and NuGene International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuGene International 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 NuGene International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuGene International has no effect on the direction of ATT i.e., ATT and NuGene International go up and down completely randomly.
Pair Corralation between ATT and NuGene International
Taking into account the 90-day investment horizon ATT is expected to generate 1.58 times less return on investment than NuGene International. But when comparing it to its historical volatility, ATT Inc is 8.39 times less risky than NuGene International. It trades about 0.06 of its potential returns per unit of risk. NuGene International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.50 in NuGene International on September 13, 2024 and sell it today you would lose (6.08) from holding NuGene International or give up 93.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. NuGene International
Performance |
| Timeline |
| ATT Inc |
| NuGene International |
ATT and NuGene International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and NuGene International
The main advantage of trading using opposite ATT and NuGene International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, NuGene International 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 NuGene International will offset losses from the drop in NuGene International's long position.The idea behind ATT Inc and NuGene International 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.| NuGene International vs. Green Planet Bio | NuGene International vs. Azure Holding Group | NuGene International vs. Four Leaf Acquisition | NuGene International vs. Opus Magnum Ameris |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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