Correlation Between MTN Group and ATT
Can any of the company-specific risk be diversified away by investing in both MTN Group 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 MTN Group and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTN Group Ltd and ATT Inc, you can compare the effects of market volatilities on MTN Group 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 MTN Group with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTN Group and ATT.
Diversification Opportunities for MTN Group and ATT
Excellent diversification
The 3 months correlation between MTN and ATT is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MTN Group Ltd and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and MTN Group 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 MTN Group Ltd 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 MTN Group i.e., MTN Group and ATT go up and down completely randomly.
Pair Corralation between MTN Group and ATT
Assuming the 90 days horizon MTN Group Ltd is expected to under-perform the ATT. In addition to that, MTN Group is 1.83 times more volatile than ATT Inc. It trades about -0.21 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.14 per unit of volatility. If you would invest 2,254 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 62.00 from holding ATT Inc or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MTN Group Ltd vs. ATT Inc
Performance |
| Timeline |
| MTN Group |
| ATT Inc |
MTN Group and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTN Group and ATT
The main advantage of trading using opposite MTN Group and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTN Group 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.| MTN Group vs. XL Axiata Tbk | MTN Group vs. Telenor ASA ADR | MTN Group vs. KT Corporation | MTN Group vs. Vodacom Group Ltd |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |