Correlation Between ATT and DIGITAL
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By analyzing existing cross correlation between ATT Inc and DIGITAL RLTY TR, you can compare the effects of market volatilities on ATT and DIGITAL 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 DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and DIGITAL.
Diversification Opportunities for ATT and DIGITAL
Excellent diversification
The 3 months correlation between ATT and DIGITAL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and DIGITAL RLTY TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL RLTY TR 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 DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL RLTY TR has no effect on the direction of ATT i.e., ATT and DIGITAL go up and down completely randomly.
Pair Corralation between ATT and DIGITAL
Taking into account the 90-day investment horizon ATT Inc is expected to generate 4.61 times more return on investment than DIGITAL. However, ATT is 4.61 times more volatile than DIGITAL RLTY TR. It trades about 0.22 of its potential returns per unit of risk. DIGITAL RLTY TR is currently generating about 0.02 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 116.00 from holding ATT Inc or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATT Inc vs. DIGITAL RLTY TR
Performance |
| Timeline |
| ATT Inc |
| DIGITAL RLTY TR |
ATT and DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and DIGITAL
The main advantage of trading using opposite ATT and DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, DIGITAL 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 DIGITAL will offset losses from the drop in DIGITAL's long position.The idea behind ATT Inc and DIGITAL RLTY TR 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.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 Stocks Directory module to find actively traded stocks across global markets.
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