Correlation Between Interconnection Electric and ATT
Can any of the company-specific risk be diversified away by investing in both Interconnection Electric 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 Interconnection Electric and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interconnection Electric SA and ATT Inc, you can compare the effects of market volatilities on Interconnection Electric 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 Interconnection Electric with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interconnection Electric and ATT.
Diversification Opportunities for Interconnection Electric and ATT
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Interconnection and ATT is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Interconnection Electric SA and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Interconnection Electric 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 Interconnection Electric SA 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 Interconnection Electric i.e., Interconnection Electric and ATT go up and down completely randomly.
Pair Corralation between Interconnection Electric and ATT
Assuming the 90 days horizon Interconnection Electric SA is expected to generate 3.79 times more return on investment than ATT. However, Interconnection Electric is 3.79 times more volatile than ATT Inc. It trades about 0.02 of its potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of risk. If you would invest 15,365 in Interconnection Electric SA on January 26, 2024 and sell it today you would lose (4,418) from holding Interconnection Electric SA or give up 28.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 87.25% |
Values | Daily Returns |
Interconnection Electric SA vs. ATT Inc
Performance |
Timeline |
Interconnection Electric |
ATT Inc |
Interconnection Electric and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Interconnection Electric and ATT
The main advantage of trading using opposite Interconnection Electric and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interconnection Electric 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.Interconnection Electric vs. Kontrol Technologies Corp | Interconnection Electric vs. 808 Renewable Energy | Interconnection Electric vs. HUMANA INC | Interconnection Electric vs. Aquagold International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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