Correlation Between ATT and American Manganese
Can any of the company-specific risk be diversified away by investing in both ATT and American Manganese 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 American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and American Manganese, you can compare the effects of market volatilities on ATT and American Manganese 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 American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and American Manganese.
Diversification Opportunities for ATT and American Manganese
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and American is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese 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 American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of ATT i.e., ATT and American Manganese go up and down completely randomly.
Pair Corralation between ATT and American Manganese
Taking into account the 90-day investment horizon ATT is expected to generate 9.14 times less return on investment than American Manganese. But when comparing it to its historical volatility, ATT Inc is 9.02 times less risky than American Manganese. It trades about 0.24 of its potential returns per unit of risk. American Manganese is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6.40 in American Manganese on August 31, 2024 and sell it today you would earn a total of 3.40 from holding American Manganese or generate 53.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. American Manganese
Performance |
| Timeline |
| ATT Inc |
| American Manganese |
ATT and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and American Manganese
The main advantage of trading using opposite ATT and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.| ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group | ATT vs. Morningstar Unconstrained Allocation |
| American Manganese vs. Liontown Resources Limited | American Manganese vs. ATT Inc | American Manganese vs. Merck Company | American Manganese vs. Walt Disney |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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