Correlation Between GDI Integrated and ATT
Can any of the company-specific risk be diversified away by investing in both GDI Integrated 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 GDI Integrated and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDI Integrated and ATT Inc, you can compare the effects of market volatilities on GDI Integrated 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 GDI Integrated with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDI Integrated and ATT.
Diversification Opportunities for GDI Integrated and ATT
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between GDI and ATT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and GDI Integrated 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 GDI Integrated 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 GDI Integrated i.e., GDI Integrated and ATT go up and down completely randomly.
Pair Corralation between GDI Integrated and ATT
Assuming the 90 days trading horizon GDI Integrated is expected to generate 0.74 times more return on investment than ATT. However, GDI Integrated is 1.36 times less risky than ATT. It trades about 0.05 of its potential returns per unit of risk. ATT Inc is currently generating about -0.26 per unit of risk. If you would invest 3,876 in GDI Integrated on January 17, 2024 and sell it today you would earn a total of 24.00 from holding GDI Integrated or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDI Integrated vs. ATT Inc
Performance |
| Timeline |
| GDI Integrated |
| ATT Inc |
GDI Integrated and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDI Integrated and ATT
The main advantage of trading using opposite GDI Integrated and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDI Integrated 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.| GDI Integrated vs. Baylin Technologies | GDI Integrated vs. Kits Eyecare | GDI Integrated vs. Greenlane Renewables | GDI Integrated vs. Supremex |
| ATT vs. Aquagold International | ATT vs. Thrivent High Yield | ATT vs. Morningstar Unconstrained Allocation | ATT vs. Via Renewables |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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