Correlation Between ATT and Fujitsu
Can any of the company-specific risk be diversified away by investing in both ATT and Fujitsu 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 Fujitsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Fujitsu Ltd ADR, you can compare the effects of market volatilities on ATT and Fujitsu 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 Fujitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Fujitsu.
Diversification Opportunities for ATT and Fujitsu
Very good diversification
The 3 months correlation between ATT and Fujitsu is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Fujitsu Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujitsu Ltd ADR 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 Fujitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujitsu Ltd ADR has no effect on the direction of ATT i.e., ATT and Fujitsu go up and down completely randomly.
Pair Corralation between ATT and Fujitsu
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.59 times more return on investment than Fujitsu. However, ATT Inc is 1.7 times less risky than Fujitsu. It trades about 0.18 of its potential returns per unit of risk. Fujitsu Ltd ADR is currently generating about 0.1 per unit of risk. If you would invest 1,780 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 536.00 from holding ATT Inc or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Fujitsu Ltd ADR
Performance |
| Timeline |
| ATT Inc |
| Fujitsu Ltd ADR |
ATT and Fujitsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Fujitsu
The main advantage of trading using opposite ATT and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Fujitsu 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 Fujitsu will offset losses from the drop in Fujitsu's long position.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
| Fujitsu vs. Eline Entertainment Group | Fujitsu vs. Green Leaf Innovations | Fujitsu vs. Plandai Biotech | Fujitsu vs. All American Gld |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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