Correlation Between ATT and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both ATT and Franklin FTSE 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 Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Franklin FTSE Canada, you can compare the effects of market volatilities on ATT and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Franklin FTSE.
Diversification Opportunities for ATT and Franklin FTSE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATT and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Franklin FTSE Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Canada 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Canada has no effect on the direction of ATT i.e., ATT and Franklin FTSE go up and down completely randomly.
Pair Corralation between ATT and Franklin FTSE
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.76 times more return on investment than Franklin FTSE. However, ATT is 1.76 times more volatile than Franklin FTSE Canada. It trades about 0.49 of its potential returns per unit of risk. Franklin FTSE Canada is currently generating about 0.14 per unit of risk. If you would invest 2,249 in ATT Inc on November 22, 2024 and sell it today you would earn a total of 375.00 from holding ATT Inc or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Franklin FTSE Canada
Performance |
| Timeline |
| ATT Inc |
| Franklin FTSE Canada |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ATT and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Franklin FTSE
The main advantage of trading using opposite ATT and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| ATT vs. Liberty Global PLC | ATT vs. Liberty Latin America | ATT vs. Liberty Latin America | ATT vs. Liberty Broadband Srs |
| Franklin FTSE vs. Franklin FTSE Australia | Franklin FTSE vs. Franklin FTSE Germany | Franklin FTSE vs. Franklin FTSE United | Franklin FTSE vs. Franklin FTSE 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.
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