Correlation Between ATT and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both ATT and NGEx Minerals 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 NGEx Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and NGEx Minerals, you can compare the effects of market volatilities on ATT and NGEx Minerals 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 NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and NGEx Minerals.
Diversification Opportunities for ATT and NGEx Minerals
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and NGEx is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of ATT i.e., ATT and NGEx Minerals go up and down completely randomly.
Pair Corralation between ATT and NGEx Minerals
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.66 times more return on investment than NGEx Minerals. However, ATT Inc is 1.52 times less risky than NGEx Minerals. It trades about 0.21 of its potential returns per unit of risk. NGEx Minerals is currently generating about 0.01 per unit of risk. If you would invest 2,267 in ATT Inc on December 25, 2024 and sell it today you would earn a total of 464.00 from holding ATT Inc or generate 20.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
ATT Inc vs. NGEx Minerals
Performance |
Timeline |
ATT Inc |
NGEx Minerals |
ATT and NGEx Minerals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATT and NGEx Minerals
The main advantage of trading using opposite ATT and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.ATT vs. Liberty Global PLC | ATT vs. Liberty Latin America | ATT vs. Liberty Latin America | ATT vs. Liberty Broadband Srs |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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