Correlation Between Rock Tech and ATT
Can any of the company-specific risk be diversified away by investing in both Rock Tech 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 Rock Tech and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rock Tech Lithium and ATT Inc, you can compare the effects of market volatilities on Rock Tech 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 Rock Tech with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rock Tech and ATT.
Diversification Opportunities for Rock Tech and ATT
Excellent diversification
The 3 months correlation between Rock and ATT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Rock Tech Lithium and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Rock Tech 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 Rock Tech 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 Rock Tech i.e., Rock Tech and ATT go up and down completely randomly.
Pair Corralation between Rock Tech and ATT
Assuming the 90 days horizon Rock Tech Lithium is expected to under-perform the ATT. In addition to that, Rock Tech is 3.48 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 0.14 per unit of volatility. If you would invest 1,342 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 928.00 from holding ATT Inc or generate 69.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rock Tech Lithium vs. ATT Inc
Performance |
| Timeline |
| Rock Tech Lithium |
| ATT Inc |
Rock Tech and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rock Tech and ATT
The main advantage of trading using opposite Rock Tech and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rock Tech 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.| Rock Tech vs. Qubec Nickel Corp | Rock Tech vs. IGO Limited | Rock Tech vs. Avarone Metals | Rock Tech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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