Correlation Between ATT and Aimia
Can any of the company-specific risk be diversified away by investing in both ATT and Aimia 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 ATT and Aimia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Aimia Inc, you can compare the effects of market volatilities on ATT and Aimia 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 ATT with a short position of Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Aimia.
Diversification Opportunities for ATT and Aimia
Very good diversification
The 3 months correlation between ATT and Aimia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and ATT 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 ATT Inc are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of ATT i.e., ATT and Aimia go up and down completely randomly.
Pair Corralation between ATT and Aimia
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.67 times more return on investment than Aimia. However, ATT Inc is 1.49 times less risky than Aimia. It trades about 0.05 of its potential returns per unit of risk. Aimia Inc is currently generating about -0.02 per unit of risk. If you would invest 1,655 in ATT Inc on August 25, 2024 and sell it today you would earn a total of 663.00 from holding ATT Inc or generate 40.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ATT Inc vs. Aimia Inc
Performance |
| Timeline |
| ATT Inc |
| Aimia Inc |
ATT and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Aimia
The main advantage of trading using opposite ATT and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia's long position.| ATT vs. Consolidated Communications | ATT vs. Cogent Communications Group | ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications |
| Aimia vs. Flow Capital Corp | Aimia vs. Ameritrans Capital Corp | Aimia vs. Blackhawk Growth Corp | Aimia vs. Azimut Holding SpA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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