Correlation Between ATT and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both ATT and SolarEdge Technologies 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 SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and SolarEdge Technologies, you can compare the effects of market volatilities on ATT and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and SolarEdge Technologies.
Diversification Opportunities for ATT and SolarEdge Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ATT and SolarEdge is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of ATT i.e., ATT and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between ATT and SolarEdge Technologies
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.22 times more return on investment than SolarEdge Technologies. However, ATT Inc is 4.47 times less risky than SolarEdge Technologies. It trades about -0.19 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.13 per unit of risk. If you would invest 1,693 in ATT Inc on January 20, 2024 and sell it today you would lose (60.00) from holding ATT Inc or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ATT Inc vs. SolarEdge Technologies
Performance |
| Timeline |
| ATT Inc |
| SolarEdge Technologies |
ATT and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and SolarEdge Technologies
The main advantage of trading using opposite ATT and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| ATT vs. Grab Holdings | ATT vs. Cadence Design Systems | ATT vs. Aquagold International | ATT vs. Thrivent High Yield |
| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. SunPower |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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