Correlation Between ATT and First Trust
Can any of the company-specific risk be diversified away by investing in both ATT and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and First Trust Developed, you can compare the effects of market volatilities on ATT and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and First Trust.
Diversification Opportunities for ATT and First Trust
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and First is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and First Trust Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Developed 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Developed has no effect on the direction of ATT i.e., ATT and First Trust go up and down completely randomly.
Pair Corralation between ATT and First Trust
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.23 times more return on investment than First Trust. However, ATT is 1.23 times more volatile than First Trust Developed. It trades about 0.1 of its potential returns per unit of risk. First Trust Developed is currently generating about 0.03 per unit of risk. If you would invest 1,459 in ATT Inc on August 28, 2024 and sell it today you would earn a total of 851.00 from holding ATT Inc or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.92% |
| Values | Daily Returns |
ATT Inc vs. First Trust Developed
Performance |
| Timeline |
| ATT Inc |
| First Trust Developed |
ATT and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and First Trust
The main advantage of trading using opposite ATT and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications | ATT vs. Liberty Broadband Srs | ATT vs. Shenandoah Telecommunications Co |
| First Trust vs. First Trust Asia | First Trust vs. First Trust United | First Trust vs. First Trust Germany | First Trust vs. First Trust Japan |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |