Correlation Between Blue Bird and ATT
Can any of the company-specific risk be diversified away by investing in both Blue Bird 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 Blue Bird and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Corp and ATT Inc, you can compare the effects of market volatilities on Blue Bird 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 Blue Bird with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and ATT.
Diversification Opportunities for Blue Bird and ATT
Significant diversification
The 3 months correlation between Blue and ATT is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Corp and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Blue Bird 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 Blue Bird Corp 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 Blue Bird i.e., Blue Bird and ATT go up and down completely randomly.
Pair Corralation between Blue Bird and ATT
Given the investment horizon of 90 days Blue Bird Corp is expected to under-perform the ATT. In addition to that, Blue Bird is 2.63 times more volatile than ATT Inc. It trades about -0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of volatility. If you would invest 1,684 in ATT Inc on January 25, 2024 and sell it today you would lose (3.00) from holding ATT Inc or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Bird Corp vs. ATT Inc
Performance |
| Timeline |
| Blue Bird Corp |
| ATT Inc |
Blue Bird and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Bird and ATT
The main advantage of trading using opposite Blue Bird and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird 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.| Blue Bird vs. Phoenix Motor Common | Blue Bird vs. Envirotech Vehicles | Blue Bird vs. Volcon Inc | Blue Bird vs. Zapp Electric Vehicles |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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