Correlation Between DFS Furniture and ATT
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and ATT Inc, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and ATT.
Diversification Opportunities for DFS Furniture and ATT
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFS and ATT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and ATT go up and down completely randomly.
Pair Corralation between DFS Furniture and ATT
Assuming the 90 days trading horizon DFS Furniture is expected to generate 4.06 times less return on investment than ATT. In addition to that, DFS Furniture is 1.75 times more volatile than ATT Inc. It trades about 0.01 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of volatility. If you would invest 1,544 in ATT Inc on October 12, 2024 and sell it today you would earn a total of 556.00 from holding ATT Inc or generate 36.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. ATT Inc
Performance |
| Timeline |
| DFS Furniture PLC |
| ATT Inc |
DFS Furniture and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and ATT
The main advantage of trading using opposite DFS Furniture and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. FIRST SAVINGS FINL | DFS Furniture vs. New Residential Investment | DFS Furniture vs. WisdomTree Investments | DFS Furniture vs. Teradata Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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