Correlation Between Refinaria and ATT
Can any of the company-specific risk be diversified away by investing in both Refinaria 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 Refinaria and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Refinaria de Petrleos and ATT Inc, you can compare the effects of market volatilities on Refinaria 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 Refinaria with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and ATT.
Diversification Opportunities for Refinaria and ATT
Pay attention - limited upside
The 3 months correlation between Refinaria and ATT is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Refinaria 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 Refinaria de Petrleos 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 Refinaria i.e., Refinaria and ATT go up and down completely randomly.
Pair Corralation between Refinaria and ATT
Assuming the 90 days trading horizon Refinaria de Petrleos is expected to under-perform the ATT. In addition to that, Refinaria is 2.66 times more volatile than ATT Inc. It trades about -0.11 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.23 per unit of volatility. If you would invest 4,334 in ATT Inc on September 2, 2024 and sell it today you would earn a total of 282.00 from holding ATT Inc or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Refinaria de Petrleos vs. ATT Inc
Performance |
| Timeline |
| Refinaria de Petrleos |
| ATT Inc |
Refinaria and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and ATT
The main advantage of trading using opposite Refinaria and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria 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.| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil SA |
| ATT vs. Lupatech SA | ATT vs. Rossi Residencial SA | ATT vs. Usinas Siderrgicas de | ATT vs. Refinaria de Petrleos |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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