Correlation Between ATT and Rockdale Resources
Can any of the company-specific risk be diversified away by investing in both ATT and Rockdale Resources 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 Rockdale Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Rockdale Resources Corp, you can compare the effects of market volatilities on ATT and Rockdale Resources 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 Rockdale Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Rockdale Resources.
Diversification Opportunities for ATT and Rockdale Resources
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and Rockdale is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Rockdale Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockdale Resources Corp 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 Rockdale Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockdale Resources Corp has no effect on the direction of ATT i.e., ATT and Rockdale Resources go up and down completely randomly.
Pair Corralation between ATT and Rockdale Resources
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.13 times more return on investment than Rockdale Resources. However, ATT Inc is 7.86 times less risky than Rockdale Resources. It trades about 0.18 of its potential returns per unit of risk. Rockdale Resources Corp is currently generating about -0.1 per unit of risk. If you would invest 1,752 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 564.00 from holding ATT Inc or generate 32.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.57% |
| Values | Daily Returns |
ATT Inc vs. Rockdale Resources Corp
Performance |
| Timeline |
| ATT Inc |
| Rockdale Resources Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATT and Rockdale Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Rockdale Resources
The main advantage of trading using opposite ATT and Rockdale Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Rockdale Resources 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 Rockdale Resources will offset losses from the drop in Rockdale Resources' long position.The idea behind ATT Inc and Rockdale Resources Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Rockdale Resources vs. AER Energy Resources | Rockdale Resources vs. Altura Energy | Rockdale Resources vs. Alamo Energy Corp | Rockdale Resources vs. Arete Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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