Correlation Between ATT and Orca Energy
Can any of the company-specific risk be diversified away by investing in both ATT and Orca Energy 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 Orca Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Orca Energy Group, you can compare the effects of market volatilities on ATT and Orca Energy 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 Orca Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Orca Energy.
Diversification Opportunities for ATT and Orca Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and Orca is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Orca Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orca Energy Group 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 Orca Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orca Energy Group has no effect on the direction of ATT i.e., ATT and Orca Energy go up and down completely randomly.
Pair Corralation between ATT and Orca Energy
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.35 times more return on investment than Orca Energy. However, ATT Inc is 2.9 times less risky than Orca Energy. It trades about 0.22 of its potential returns per unit of risk. Orca Energy Group is currently generating about 0.04 per unit of risk. If you would invest 2,211 in ATT Inc on August 29, 2024 and sell it today you would earn a total of 116.50 from holding ATT Inc or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATT Inc vs. Orca Energy Group
Performance |
| Timeline |
| ATT Inc |
| Orca Energy Group |
ATT and Orca Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Orca Energy
The main advantage of trading using opposite ATT and Orca Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Orca Energy 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 Orca Energy will offset losses from the drop in Orca Energy's long position.The idea behind ATT Inc and Orca Energy Group 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.| Orca Energy vs. Yamaha Motor Co | Orca Energy vs. Nitto Denko Corp | Orca Energy vs. Farmers Merchants Bancorp | Orca Energy vs. Furukawa Electric Co |
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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