Correlation Between Core Lithium and ATT
Can any of the company-specific risk be diversified away by investing in both Core Lithium 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 Core Lithium and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Lithium and ATT Inc, you can compare the effects of market volatilities on Core Lithium 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 Core Lithium with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Lithium and ATT.
Diversification Opportunities for Core Lithium and ATT
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Core and ATT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Core Lithium 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 Core Lithium 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 Core Lithium i.e., Core Lithium and ATT go up and down completely randomly.
Pair Corralation between Core Lithium and ATT
Assuming the 90 days horizon Core Lithium is expected to generate 1.05 times less return on investment than ATT. In addition to that, Core Lithium is 8.86 times more volatile than ATT Inc. It trades about 0.02 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.17 per unit of volatility. If you would invest 1,651 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 665.00 from holding ATT Inc or generate 40.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Lithium vs. ATT Inc
Performance |
| Timeline |
| Core Lithium |
| ATT Inc |
Core Lithium and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Lithium and ATT
The main advantage of trading using opposite Core Lithium and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium 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.| Core Lithium vs. Qubec Nickel Corp | Core Lithium vs. IGO Limited | Core Lithium vs. Avarone Metals | Core Lithium vs. Adriatic Metals PLC |
| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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