Correlation Between KT and ATT

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

Diversification Opportunities for KT and ATT

KTATTDiversified AwayKTATTDiversified Away100%
-0.1
  Correlation Coefficient
 KT
 ATT

Good diversification

The 3 months correlation between KT and ATT is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and KT 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 KT Corporation 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 KT i.e., KT and ATT go up and down completely randomly.

Pair Corralation between KT and ATT

Allowing for the 90-day total investment horizon KT Corporation is expected to generate 2.61 times more return on investment than ATT. However, KT is 2.61 times more volatile than ATT Inc. It trades about 0.11 of its potential returns per unit of risk. ATT Inc is currently generating about -0.13 per unit of risk. If you would invest  1,696  in KT Corporation on November 23, 2024 and sell it today you would earn a total of  47.00  from holding KT Corporation or generate 2.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

KT Corp.  vs.  ATT Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 051015
JavaScript chart by amCharts 3.21.15KT TBB
       Timeline  
KT Corporation 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, KT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15.51616.51717.51818.5
ATT Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, ATT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb23.223.423.623.82424.2

KT and ATT Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.96-3.72-2.47-1.230.01.282.63.925.256.57 0.20.40.60.81.01.21.4
JavaScript chart by amCharts 3.21.15KT TBB
       Returns  

Pair Trading with KT and ATT

The main advantage of trading using opposite KT and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT 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 KT Corporation 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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