Correlation Between SKAGEN Global and ATT
Can any of the company-specific risk be diversified away by investing in both SKAGEN Global 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 SKAGEN Global and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKAGEN Global A and ATT Inc, you can compare the effects of market volatilities on SKAGEN Global 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 SKAGEN Global with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKAGEN Global and ATT.
Diversification Opportunities for SKAGEN Global and ATT
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SKAGEN and ATT is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SKAGEN Global A and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and SKAGEN Global 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 SKAGEN Global A 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 SKAGEN Global i.e., SKAGEN Global and ATT go up and down completely randomly.
Pair Corralation between SKAGEN Global and ATT
Assuming the 90 days trading horizon SKAGEN Global A is expected to under-perform the ATT. But the stock apears to be less risky and, when comparing its historical volatility, SKAGEN Global A is 1.2 times less risky than ATT. The stock trades about -0.18 of its potential returns per unit of risk. The ATT Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,697 in ATT Inc on February 8, 2024 and sell it today you would earn a total of 11.00 from holding ATT Inc or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKAGEN Global A vs. ATT Inc
Performance |
| Timeline |
| SKAGEN Global A |
| ATT Inc |
SKAGEN Global and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKAGEN Global and ATT
The main advantage of trading using opposite SKAGEN Global and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKAGEN Global 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.| SKAGEN Global vs. Novo Nordisk AS | SKAGEN Global vs. Nordea Bank Abp | SKAGEN Global vs. DSV Panalpina AS | SKAGEN Global vs. AP Mller |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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