Correlation Between ATT and China Health
Can any of the company-specific risk be diversified away by investing in both ATT and China Health 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 China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and China Health Industries, you can compare the effects of market volatilities on ATT and China Health 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 China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and China Health.
Diversification Opportunities for ATT and China Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and China is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and China Health Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Industries 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 China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Industries has no effect on the direction of ATT i.e., ATT and China Health go up and down completely randomly.
Pair Corralation between ATT and China Health
If you would invest 2,211 in ATT Inc on August 28, 2024 and sell it today you would earn a total of 99.00 from holding ATT Inc or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ATT Inc vs. China Health Industries
Performance |
| Timeline |
| ATT Inc |
| China Health Industries |
ATT and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and China Health
The main advantage of trading using opposite ATT and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, China Health 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 China Health will offset losses from the drop in China Health's long position.| ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications | ATT vs. Liberty Broadband Srs | ATT vs. Shenandoah Telecommunications Co |
| China Health vs. Sphere Entertainment Co | China Health vs. Digi International | China Health vs. Anterix | China Health vs. Kandi Technologies Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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