Correlation Between ATT and Advanced Info
Can any of the company-specific risk be diversified away by investing in both ATT and Advanced Info 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 Advanced Info into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Advanced Info Service, you can compare the effects of market volatilities on ATT and Advanced Info 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 Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Advanced Info.
Diversification Opportunities for ATT and Advanced Info
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Advanced is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service 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 Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of ATT i.e., ATT and Advanced Info go up and down completely randomly.
Pair Corralation between ATT and Advanced Info
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.22 times more return on investment than Advanced Info. However, ATT Inc is 4.5 times less risky than Advanced Info. It trades about 0.24 of its potential returns per unit of risk. Advanced Info Service is currently generating about 0.03 per unit of risk. If you would invest 2,202 in ATT Inc on August 31, 2024 and sell it today you would earn a total of 125.00 from holding ATT Inc or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Advanced Info Service
Performance |
| Timeline |
| ATT Inc |
| Advanced Info Service |
ATT and Advanced Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Advanced Info
The main advantage of trading using opposite ATT and Advanced Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Advanced Info 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 Advanced Info will offset losses from the drop in Advanced Info's long position.| ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group | ATT vs. Morningstar Unconstrained Allocation |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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