Correlation Between ATT and Fidelity Fundamental
Can any of the company-specific risk be diversified away by investing in both ATT and Fidelity Fundamental 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 Fidelity Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Fidelity Fundamental Large, you can compare the effects of market volatilities on ATT and Fidelity Fundamental 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 Fidelity Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Fidelity Fundamental.
Diversification Opportunities for ATT and Fidelity Fundamental
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Fidelity Fundamental Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Fundamental 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 Fidelity Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Fundamental has no effect on the direction of ATT i.e., ATT and Fidelity Fundamental go up and down completely randomly.
Pair Corralation between ATT and Fidelity Fundamental
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.23 times more return on investment than Fidelity Fundamental. However, ATT is 1.23 times more volatile than Fidelity Fundamental Large. It trades about 0.26 of its potential returns per unit of risk. Fidelity Fundamental Large is currently generating about 0.12 per unit of risk. If you would invest 2,183 in ATT Inc on August 26, 2024 and sell it today you would earn a total of 135.00 from holding ATT Inc or generate 6.18% 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. Fidelity Fundamental Large
Performance |
| Timeline |
| ATT Inc |
| Fidelity Fundamental |
ATT and Fidelity Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Fidelity Fundamental
The main advantage of trading using opposite ATT and Fidelity Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Fidelity Fundamental 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 Fidelity Fundamental will offset losses from the drop in Fidelity Fundamental's long position.| ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications | ATT vs. Liberty Broadband Srs | ATT vs. Shenandoah Telecommunications Co |
| Fidelity Fundamental vs. FT Vest Equity | Fidelity Fundamental vs. Northern Lights | Fidelity Fundamental vs. Dimensional International High | Fidelity Fundamental vs. First Trust Exchange Traded |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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