Correlation Between ATT and Oconee Financial
Can any of the company-specific risk be diversified away by investing in both ATT and Oconee Financial 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 Oconee Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Oconee Financial, you can compare the effects of market volatilities on ATT and Oconee Financial 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 Oconee Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Oconee Financial.
Diversification Opportunities for ATT and Oconee Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ATT and Oconee is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial 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 Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of ATT i.e., ATT and Oconee Financial go up and down completely randomly.
Pair Corralation between ATT and Oconee Financial
Taking into account the 90-day investment horizon ATT Inc is expected to generate 5.48 times more return on investment than Oconee Financial. However, ATT is 5.48 times more volatile than Oconee Financial. It trades about 0.2 of its potential returns per unit of risk. Oconee Financial is currently generating about 0.31 per unit of risk. If you would invest 2,218 in ATT Inc on August 30, 2024 and sell it today you would earn a total of 109.00 from holding ATT Inc or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATT Inc vs. Oconee Financial
Performance |
| Timeline |
| ATT Inc |
| Oconee Financial |
ATT and Oconee Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Oconee Financial
The main advantage of trading using opposite ATT and Oconee Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Oconee Financial 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 Oconee Financial will offset losses from the drop in Oconee Financial's long position.The idea behind ATT Inc and Oconee Financial 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.| Oconee Financial vs. Pioneer Bankcorp | Oconee Financial vs. Liberty Northwest Bancorp | Oconee Financial vs. First Community | Oconee Financial vs. Coeur dAlene Bancorp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |