Correlation Between General Electric and ATT

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both General Electric 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 General Electric and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Electric and ATT Inc, you can compare the effects of market volatilities on General Electric 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 General Electric with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Electric and ATT.

Diversification Opportunities for General Electric and ATT

0.15
  Correlation Coefficient

Average diversification

The 24 months correlation between General and ATT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Electric and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and General Electric 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 General Electric 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 General Electric i.e., General Electric and ATT go up and down completely randomly.

Pair Corralation between General Electric and ATT

Allowing for the 90-day total investment horizon General Electric is expected to generate 1.59 times more return on investment than ATT. However, General Electric is 1.59 times more volatile than ATT Inc. It trades about 0.05 of its potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of risk. If you would invest  5,144  in General Electric on May 19, 2022 and sell it today you would earn a total of  2,848  from holding General Electric or generate 55.37% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

General Electric  vs.  ATT Inc

 Performance (%) 
       Timeline  
General Electric 
General Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, General Electric may actually be approaching a critical reversion point that can send shares even higher in September 2022.

General Price Channel

ATT Inc 
ATT Performance
0 of 100
Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ATT Price Channel

General Electric and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Electric and ATT

The main advantage of trading using opposite General Electric and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Electric 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 General Electric 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go