Correlation Between SMA Solar and ATT
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and ATT Inc, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and ATT.
Diversification Opportunities for SMA Solar and ATT
Pay attention - limited upside
The 3 months correlation between SMA and ATT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and ATT go up and down completely randomly.
Pair Corralation between SMA Solar and ATT
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the ATT. In addition to that, SMA Solar is 3.08 times more volatile than ATT Inc. It trades about -0.05 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 1,973 in ATT Inc on September 15, 2024 and sell it today you would earn a total of 268.00 from holding ATT Inc or generate 13.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.48% |
Values | Daily Returns |
SMA Solar Technology vs. ATT Inc
Performance |
Timeline |
SMA Solar Technology |
ATT Inc |
SMA Solar and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SMA Solar and ATT
The main advantage of trading using opposite SMA Solar and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.SMA Solar vs. Sunrun Inc | SMA Solar vs. Superior Plus Corp | SMA Solar vs. SIVERS SEMICONDUCTORS AB | SMA Solar vs. Norsk Hydro ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |