Correlation Between ATT and Marcus
Can any of the company-specific risk be diversified away by investing in both ATT and Marcus 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 Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Marcus, you can compare the effects of market volatilities on ATT and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Marcus.
Diversification Opportunities for ATT and Marcus
Poor diversification
The 3 months correlation between ATT and Marcus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of ATT i.e., ATT and Marcus go up and down completely randomly.
Pair Corralation between ATT and Marcus
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.85 times more return on investment than Marcus. However, ATT Inc is 1.17 times less risky than Marcus. It trades about 0.05 of its potential returns per unit of risk. Marcus is currently generating about 0.04 per unit of risk. If you would invest 1,655 in ATT Inc on August 24, 2024 and sell it today you would earn a total of 643.00 from holding ATT Inc or generate 38.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Marcus
Performance |
| Timeline |
| ATT Inc |
| Marcus |
ATT and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Marcus
The main advantage of trading using opposite ATT and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.| ATT vs. Small Cap Core | ATT vs. FitLife Brands, Common | ATT vs. Mutual Of America | ATT vs. Gfl Environmental Holdings |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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