Correlation Between ATT and SPECTRA
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By analyzing existing cross correlation between ATT Inc and SPECTRA ENERGY PARTNERS, you can compare the effects of market volatilities on ATT and SPECTRA 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 SPECTRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and SPECTRA.
Diversification Opportunities for ATT and SPECTRA
Very good diversification
The 3 months correlation between ATT and SPECTRA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and SPECTRA ENERGY PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRA ENERGY PARTNERS 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 SPECTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRA ENERGY PARTNERS has no effect on the direction of ATT i.e., ATT and SPECTRA go up and down completely randomly.
Pair Corralation between ATT and SPECTRA
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.27 times more return on investment than SPECTRA. However, ATT is 1.27 times more volatile than SPECTRA ENERGY PARTNERS. It trades about 0.19 of its potential returns per unit of risk. SPECTRA ENERGY PARTNERS is currently generating about -0.01 per unit of risk. If you would invest 1,737 in ATT Inc on September 6, 2024 and sell it today you would earn a total of 616.00 from holding ATT Inc or generate 35.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 68.0% |
Values | Daily Returns |
ATT Inc vs. SPECTRA ENERGY PARTNERS
Performance |
Timeline |
ATT Inc |
SPECTRA ENERGY PARTNERS |
ATT and SPECTRA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATT and SPECTRA
The main advantage of trading using opposite ATT and SPECTRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, SPECTRA 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 SPECTRA will offset losses from the drop in SPECTRA's long position.The idea behind ATT Inc and SPECTRA ENERGY PARTNERS 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.SPECTRA vs. Ecolab Inc | SPECTRA vs. Keurig Dr Pepper | SPECTRA vs. Avient Corp | SPECTRA vs. CVR Partners LP |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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