Correlation Between 90265EAT7 and ATT

Can any of the company-specific risk be diversified away by investing in both 90265EAT7 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 90265EAT7 and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US90265EAT73 and ATT Inc, you can compare the effects of market volatilities on 90265EAT7 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 90265EAT7 with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90265EAT7 and ATT.

Diversification Opportunities for 90265EAT7 and ATT

0.61

Correlation Coefficient

90265EAT7  ATT

Poor diversification

The 3 months correlation between 90265EAT7 and ATT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding US90265EAT73 and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and 90265EAT7 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 US90265EAT73 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 90265EAT7 i.e., 90265EAT7 and ATT go up and down completely randomly.

Pair Corralation between 90265EAT7 and ATT

Assuming the 90 days trading horizon US90265EAT73 is expected to under-perform the ATT. But the bond apears to be less risky and, when comparing its historical volatility, US90265EAT73 is 1.07 times less risky than ATT. The bond trades about -0.01 of its potential returns per unit of risk. The ATT Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,688  in ATT Inc on September 3, 2024 and sell it today you would earn a total of  628.00  from holding ATT Inc or generate 37.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	41.21%
Values	Daily Returns

US90265EAT73  vs.  ATT Inc

US90265EAT73

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US90265EAT73 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for US90265EAT73 investors.

ATT Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 14 (%) 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.

Pair Trading with 90265EAT7 and ATT

The main advantage of trading using opposite 90265EAT7 and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90265EAT7 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 US90265EAT73 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.