Correlation Between Bourque Indts and ATT

Can any of the company-specific risk be diversified away by investing in both Bourque Indts and ATT 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 Bourque Indts and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bourque Indts and ATT Inc, you can compare the effects of market volatilities on Bourque Indts and ATT 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 Bourque Indts with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bourque Indts and ATT.

Diversification Opportunities for Bourque Indts and ATT

0.0

Correlation Coefficient

Bourque Indts  ATT

Pay attention - limited upside

The 3 months correlation between Bourque and ATT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bourque Indts and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Bourque Indts 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 Bourque Indts are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Bourque Indts i.e., Bourque Indts and ATT go up and down completely randomly.

Pair Corralation between Bourque Indts and ATT

If you would invest  2,267  in ATT Inc on December 26, 2024 and sell it today you would earn a total of  498.00  from holding ATT Inc or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bourque Indts  vs.  ATT Inc

Bourque Indts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bourque Indts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bourque Indts is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

ATT Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bourque Indts and ATT

The main advantage of trading using opposite Bourque Indts and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bourque Indts position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.

The idea behind Bourque Indts and ATT Inc 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.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.