Correlation Between Scottie Resources and ATT
Can any of the company-specific risk be diversified away by investing in both Scottie Resources 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 Scottie Resources and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottie Resources Corp and ATT Inc, you can compare the effects of market volatilities on Scottie Resources 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 Scottie Resources with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and ATT.
Diversification Opportunities for Scottie Resources and ATT
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scottie and ATT is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Scottie Resources 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 Scottie Resources Corp 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 Scottie Resources i.e., Scottie Resources and ATT go up and down completely randomly.
Pair Corralation between Scottie Resources and ATT
Assuming the 90 days horizon Scottie Resources Corp is expected to generate 9.44 times more return on investment than ATT. However, Scottie Resources is 9.44 times more volatile than ATT Inc. It trades about 0.09 of its potential returns per unit of risk. ATT Inc is currently generating about 0.14 per unit of risk. If you would invest 11.00 in Scottie Resources Corp on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Scottie Resources Corp or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottie Resources Corp vs. ATT Inc
Performance |
| Timeline |
| Scottie Resources Corp |
| ATT Inc |
Scottie Resources and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and ATT
The main advantage of trading using opposite Scottie Resources and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources 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.| Scottie Resources vs. Defiance Silver Corp | Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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