Correlation Between CBrain AS and ATT
Can any of the company-specific risk be diversified away by investing in both CBrain AS 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 CBrain AS and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and ATT Inc, you can compare the effects of market volatilities on CBrain AS 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 CBrain AS with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and ATT.
Diversification Opportunities for CBrain AS and ATT
Significant diversification
The 3 months correlation between CBrain and ATT is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and CBrain AS 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 cBrain AS 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 CBrain AS i.e., CBrain AS and ATT go up and down completely randomly.
Pair Corralation between CBrain AS and ATT
Assuming the 90 days trading horizon cBrain AS is expected to under-perform the ATT. In addition to that, CBrain AS is 1.92 times more volatile than ATT Inc. It trades about -0.42 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.02 per unit of volatility. If you would invest 1,690 in ATT Inc on January 26, 2024 and sell it today you would lose (9.00) from holding ATT Inc or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
cBrain AS vs. ATT Inc
Performance |
| Timeline |
| cBrain AS |
| ATT Inc |
CBrain AS and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and ATT
The main advantage of trading using opposite CBrain AS and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS 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.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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