Correlation Between ATT and TIM SA
Can any of the company-specific risk be diversified away by investing in both ATT and TIM SA 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 ATT and TIM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and TIM SA, you can compare the effects of market volatilities on ATT and TIM SA 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 ATT with a short position of TIM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and TIM SA.
Diversification Opportunities for ATT and TIM SA
Pay attention - limited upside
The 3 months correlation between ATT and TIM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and TIM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM SA and ATT 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 ATT Inc are associated (or correlated) with TIM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM SA has no effect on the direction of ATT i.e., ATT and TIM SA go up and down completely randomly.
Pair Corralation between ATT and TIM SA
Assuming the 90 days trading horizon ATT Inc is expected to generate 0.67 times more return on investment than TIM SA. However, ATT Inc is 1.49 times less risky than TIM SA. It trades about 0.24 of its potential returns per unit of risk. TIM SA is currently generating about -0.12 per unit of risk. If you would invest 4,214 in ATT Inc on August 27, 2024 and sell it today you would earn a total of 275.00 from holding ATT Inc or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. TIM SA
Performance |
| Timeline |
| ATT Inc |
| TIM SA |
ATT and TIM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and TIM SA
The main advantage of trading using opposite ATT and TIM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, TIM SA 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 TIM SA will offset losses from the drop in TIM SA's long position.| ATT vs. Monster Beverage | ATT vs. UnitedHealth Group Incorporated | ATT vs. American Airlines Group | ATT vs. Planet Fitness |
| TIM SA vs. Telefnica Brasil SA | TIM SA vs. Companhia Brasileira de | TIM SA vs. Natura Co Holding | TIM SA vs. Yduqs Participaes SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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