Correlation Between ATT and Finning International
Can any of the company-specific risk be diversified away by investing in both ATT and Finning International 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 Finning International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Finning International, you can compare the effects of market volatilities on ATT and Finning International 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 Finning International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Finning International.
Diversification Opportunities for ATT and Finning International
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and Finning is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Finning International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finning International 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 Finning International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finning International has no effect on the direction of ATT i.e., ATT and Finning International go up and down completely randomly.
Pair Corralation between ATT and Finning International
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.59 times more return on investment than Finning International. However, ATT Inc is 1.7 times less risky than Finning International. It trades about 0.18 of its potential returns per unit of risk. Finning International is currently generating about -0.15 per unit of risk. If you would invest 2,215 in ATT Inc on September 13, 2024 and sell it today you would earn a total of 121.00 from holding ATT Inc or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ATT Inc vs. Finning International
Performance |
| Timeline |
| ATT Inc |
| Finning International |
ATT and Finning International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Finning International
The main advantage of trading using opposite ATT and Finning International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Finning International 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 Finning International will offset losses from the drop in Finning International's long position.The idea behind ATT Inc and Finning International 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.| Finning International vs. Toromont Industries | Finning International vs. Doman Building Materials | Finning International vs. DXP Enterprises | Finning International vs. Applied Industrial Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |