This module allows you to analyze existing cross correlation between Alphabet and T. You can compare the effects of market volatilities on Alphabet and T 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 Alphabet with a short position of T. See also your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and T.
Given the investment horizon of 30 days, Alphabet is expected to generate 0.63 times more return on investment than T. However, Alphabet is 1.59 times less risky than T. It trades about 0.31 of its potential returns per unit of risk. T is currently generating about -0.06 per unit of risk. If you would invest 107,566 in Alphabet on May 25, 2018 and sell it today you would earn a total of 7,982 from holding Alphabet or generate 7.42% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc and AT&T INC. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on T and Alphabet 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 Alphabet are associated (or correlated) with T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T has no effect on the direction of Alphabet i.e. Alphabet and T go up and down completely randomly.
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