Correlation Between Sapiens International and ATT
Can any of the company-specific risk be diversified away by investing in both Sapiens International 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 Sapiens International and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapiens International and ATT Inc, you can compare the effects of market volatilities on Sapiens International 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 Sapiens International with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and ATT.
Diversification Opportunities for Sapiens International and ATT
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sapiens and ATT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Sapiens International 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 Sapiens International 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 Sapiens International i.e., Sapiens International and ATT go up and down completely randomly.
Pair Corralation between Sapiens International and ATT
Assuming the 90 days trading horizon Sapiens International is expected to generate 1.26 times more return on investment than ATT. However, Sapiens International is 1.26 times more volatile than ATT Inc. It trades about 0.07 of its potential returns per unit of risk. ATT Inc is currently generating about 0.04 per unit of risk. If you would invest 973,833 in Sapiens International on January 25, 2024 and sell it today you would earn a total of 195,167 from holding Sapiens International or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.19% |
| Values | Daily Returns |
Sapiens International vs. ATT Inc
Performance |
| Timeline |
| Sapiens International |
| ATT Inc |
Sapiens International and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapiens International and ATT
The main advantage of trading using opposite Sapiens International and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapiens International 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.| Sapiens International vs. Nice | Sapiens International vs. Tower Semiconductor | Sapiens International vs. Opko Health | Sapiens International vs. Elbit Systems |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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