Correlation Between ATT and EXp World
Can any of the company-specific risk be diversified away by investing in both ATT and EXp World 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 EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and eXp World Holdings, you can compare the effects of market volatilities on ATT and EXp World 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 EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and EXp World.
Diversification Opportunities for ATT and EXp World
Significant diversification
The 3 months correlation between ATT and EXp is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and eXp World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eXp World Holdings 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 EXp World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eXp World Holdings has no effect on the direction of ATT i.e., ATT and EXp World go up and down completely randomly.
Pair Corralation between ATT and EXp World
Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the EXp World. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 3.45 times less risky than EXp World. The stock trades about -0.12 of its potential returns per unit of risk. The eXp World Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 946.00 in eXp World Holdings on January 20, 2024 and sell it today you would earn a total of 39.00 from holding eXp World Holdings or generate 4.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ATT Inc vs. eXp World Holdings
Performance |
Timeline |
ATT Inc |
eXp World Holdings |
ATT and EXp World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATT and EXp World
The main advantage of trading using opposite ATT and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, EXp World 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 EXp World will offset losses from the drop in EXp World's long position.ATT vs. Grab Holdings | ATT vs. Cadence Design Systems | ATT vs. Aquagold International | ATT vs. Thrivent High Yield |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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