Correlation Between SBA Communications and ATT

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Can any of the company-specific risk be diversified away by investing in both SBA Communications 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 SBA Communications and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications and ATT Inc, you can compare the effects of market volatilities on SBA Communications 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 SBA Communications with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and ATT.

Diversification Opportunities for SBA Communications and ATT

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between SBA Communications and ATT is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and SBA Communications 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 SBA Communications 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 SBA Communications i.e., SBA Communications and ATT go up and down completely randomly.

Pair Corralation between SBA Communications and ATT

Given the investment horizon of 90 days SBA Communications is expected to under-perform the ATT. In addition to that, SBA Communications is 1.63 times more volatile than ATT Inc. It trades about -0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.15 per unit of volatility. If you would invest  1,907  in ATT Inc on March 28, 2022 and sell it today you would earn a total of  192.00  from holding ATT Inc or generate 10.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SBA Communications  vs.  ATT Inc

 Performance (%) 
      Timeline 
SBA Communications 
SBA Communications Performance
0 of 100
Over the last 90 days SBA Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SBA Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0088
Payout Ratio
0.36
Forward Annual Dividend Rate
2.58
Dividend Date
2022-06-14
Ex Dividend Date
2022-05-18

SBA Communications Price Channel

ATT Inc 
ATT Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0556
Payout Ratio
0.56
Last Split Factor
1324:1000
Forward Annual Dividend Rate
1.11
Dividend Date
2022-05-02
Ex Dividend Date
2022-04-13
Last Split Date
2022-04-11

ATT Price Channel

SBA Communications and ATT Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with SBA Communications and ATT

The main advantage of trading using opposite SBA Communications and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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.
The idea behind SBA Communications and ATT Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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