Correlation Between ATT and Starboard Investment

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

By analyzing existing cross correlation between ATT Inc and Starboard Investment Trust, you can compare the effects of market volatilities on ATT and Starboard Investment 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 Starboard Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Starboard Investment.

Diversification Opportunities for ATT and Starboard Investment

0.61

Correlation Coefficient

ATT  Starboard Investment

Poor diversification

The 3 months correlation between ATT and Starboard is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Starboard Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starboard Investment 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 Starboard Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starboard Investment has no effect on the direction of ATT i.e., ATT and Starboard Investment go up and down completely randomly.

Pair Corralation between ATT and Starboard Investment

Taking into account the 90-day investment horizon ATT is expected to generate 31.92 times less return on investment than Starboard Investment. But when comparing it to its historical volatility, ATT Inc is 1.37 times less risky than Starboard Investment. It trades about 0.01 of its potential returns per unit of risk. Starboard Investment Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,581  in Starboard Investment Trust on October 20, 2024 and sell it today you would earn a total of  48.00  from holding Starboard Investment Trust or generate 3.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

ATT Inc  vs.  Starboard Investment Trust

ATT Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Starboard Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Starboard Investment Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Starboard Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATT and Starboard Investment

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

The idea behind ATT Inc and Starboard Investment Trust 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.