Correlation Between ATT and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both ATT and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and SPDR Kensho Future, you can compare the effects of market volatilities on ATT and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and SPDR Kensho.
Diversification Opportunities for ATT and SPDR Kensho
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and SPDR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and SPDR Kensho Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Future 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 SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Future has no effect on the direction of ATT i.e., ATT and SPDR Kensho go up and down completely randomly.
Pair Corralation between ATT and SPDR Kensho
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.34 times more return on investment than SPDR Kensho. However, ATT is 1.34 times more volatile than SPDR Kensho Future. It trades about 0.09 of its potential returns per unit of risk. SPDR Kensho Future is currently generating about 0.1 per unit of risk. If you would invest 1,459 in ATT Inc on August 31, 2024 and sell it today you would earn a total of 857.00 from holding ATT Inc or generate 58.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
ATT Inc vs. SPDR Kensho Future
Performance |
| Timeline |
| ATT Inc |
| SPDR Kensho Future |
ATT and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and SPDR Kensho
The main advantage of trading using opposite ATT and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group | ATT vs. Morningstar Unconstrained Allocation |
| SPDR Kensho vs. SPDR STOXX Europe | SPDR Kensho vs. SPDR Bloomberg Barclays | SPDR Kensho vs. SPDR Kensho Intelligent | SPDR Kensho vs. SPDR SP Kensho |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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