Correlation Between ATT and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both ATT and Stone Ridge 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 Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Stone Ridge 2057, you can compare the effects of market volatilities on ATT and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Stone Ridge.
Diversification Opportunities for ATT and Stone Ridge
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and Stone is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Stone Ridge 2057 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2057 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2057 has no effect on the direction of ATT i.e., ATT and Stone Ridge go up and down completely randomly.
Pair Corralation between ATT and Stone Ridge
Taking into account the 90-day investment horizon ATT Inc is expected to generate 2.35 times more return on investment than Stone Ridge. However, ATT is 2.35 times more volatile than Stone Ridge 2057. It trades about 0.18 of its potential returns per unit of risk. Stone Ridge 2057 is currently generating about -0.13 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 | 44.0% |
| Values | Daily Returns |
ATT Inc vs. Stone Ridge 2057
Performance |
| Timeline |
| ATT Inc |
| Stone Ridge 2057 |
ATT and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Stone Ridge
The main advantage of trading using opposite ATT and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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