Correlation Between Metals Creek and ATT
Can any of the company-specific risk be diversified away by investing in both Metals Creek 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 Metals Creek and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Creek Resources and ATT Inc, you can compare the effects of market volatilities on Metals Creek 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 Metals Creek with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Creek and ATT.
Diversification Opportunities for Metals Creek and ATT
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metals and ATT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Metals Creek Resources and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Metals Creek 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 Metals Creek Resources 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 Metals Creek i.e., Metals Creek and ATT go up and down completely randomly.
Pair Corralation between Metals Creek and ATT
Assuming the 90 days horizon Metals Creek Resources is expected to generate 25.9 times more return on investment than ATT. However, Metals Creek is 25.9 times more volatile than ATT Inc. It trades about 0.19 of its potential returns per unit of risk. ATT Inc is currently generating about 0.33 per unit of risk. If you would invest 2.00 in Metals Creek Resources on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Metals Creek Resources or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Creek Resources vs. ATT Inc
Performance |
| Timeline |
| Metals Creek Resources |
| ATT Inc |
Metals Creek and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Creek and ATT
The main advantage of trading using opposite Metals Creek and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Creek 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.| Metals Creek vs. Qubec Nickel Corp | Metals Creek vs. IGO Limited | Metals Creek vs. Avarone Metals | Metals Creek 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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