Correlation Between ATT and Interra Copper
Can any of the company-specific risk be diversified away by investing in both ATT and Interra Copper 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 Interra Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Interra Copper Corp, you can compare the effects of market volatilities on ATT and Interra Copper 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 Interra Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Interra Copper.
Diversification Opportunities for ATT and Interra Copper
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ATT and Interra is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Interra Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interra Copper Corp 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 Interra Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interra Copper Corp has no effect on the direction of ATT i.e., ATT and Interra Copper go up and down completely randomly.
Pair Corralation between ATT and Interra Copper
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.05 times more return on investment than Interra Copper. However, ATT Inc is 18.52 times less risky than Interra Copper. It trades about 0.25 of its potential returns per unit of risk. Interra Copper Corp is currently generating about 0.01 per unit of risk. If you would invest 2,212 in ATT Inc on September 2, 2024 and sell it today you would earn a total of 104.00 from holding ATT Inc or generate 4.7% 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. Interra Copper Corp
Performance |
| Timeline |
| ATT Inc |
| Interra Copper Corp |
ATT and Interra Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Interra Copper
The main advantage of trading using opposite ATT and Interra Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Interra Copper 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 Interra Copper will offset losses from the drop in Interra Copper's long position.The idea behind ATT Inc and Interra Copper Corp 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.| Interra Copper vs. Sherritt International | Interra Copper vs. Metals X Limited | Interra Copper vs. Anglo American PLC | Interra Copper vs. ZincX Resources Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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