Correlation Between ATT and Saga Communications
Can any of the company-specific risk be diversified away by investing in both ATT and Saga Communications 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 Saga Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Saga Communications, you can compare the effects of market volatilities on ATT and Saga Communications 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 Saga Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Saga Communications.
Diversification Opportunities for ATT and Saga Communications
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and Saga is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications 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 Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of ATT i.e., ATT and Saga Communications go up and down completely randomly.
Pair Corralation between ATT and Saga Communications
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.76 times more return on investment than Saga Communications. However, ATT Inc is 1.32 times less risky than Saga Communications. It trades about 0.22 of its potential returns per unit of risk. Saga Communications is currently generating about -0.08 per unit of risk. If you would invest 1,965 in ATT Inc on August 30, 2024 and sell it today you would earn a total of 362.00 from holding ATT Inc or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Saga Communications
Performance |
| Timeline |
| ATT Inc |
| Saga Communications |
ATT and Saga Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Saga Communications
The main advantage of trading using opposite ATT and Saga Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Saga Communications 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 Saga Communications will offset losses from the drop in Saga Communications' long position.| ATT vs. Verizon Communications | ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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