Correlation Between ATT and LOWES
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By analyzing existing cross correlation between ATT Inc and LOWES INC 3375, you can compare the effects of market volatilities on ATT and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and LOWES.
Diversification Opportunities for ATT and LOWES
Excellent diversification
The 3 months correlation between ATT and LOWES is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and LOWES INC 3375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 3375 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 3375 has no effect on the direction of ATT i.e., ATT and LOWES go up and down completely randomly.
Pair Corralation between ATT and LOWES
Taking into account the 90-day investment horizon ATT Inc is expected to generate 2.73 times more return on investment than LOWES. However, ATT is 2.73 times more volatile than LOWES INC 3375. It trades about 0.18 of its potential returns per unit of risk. LOWES INC 3375 is currently generating about -0.19 per unit of risk. If you would invest 2,192 in ATT Inc on September 4, 2024 and sell it today you would earn a total of 78.00 from holding ATT Inc or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ATT Inc vs. LOWES INC 3375
Performance |
| Timeline |
| ATT Inc |
| LOWES INC 3375 |
ATT and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and LOWES
The main advantage of trading using opposite ATT and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.The idea behind ATT Inc and LOWES INC 3375 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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