Correlation Between ATT and South Star
Can any of the company-specific risk be diversified away by investing in both ATT and South Star 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 South Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and South Star Battery, you can compare the effects of market volatilities on ATT and South Star 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 South Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and South Star.
Diversification Opportunities for ATT and South Star
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and South is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and South Star Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Star Battery 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 South Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Star Battery has no effect on the direction of ATT i.e., ATT and South Star go up and down completely randomly.
Pair Corralation between ATT and South Star
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.22 times more return on investment than South Star. However, ATT Inc is 4.54 times less risky than South Star. It trades about 0.12 of its potential returns per unit of risk. South Star Battery is currently generating about 0.02 per unit of risk. If you would invest 1,419 in ATT Inc on December 13, 2024 and sell it today you would earn a total of 1,153 from holding ATT Inc or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.92% |
| Values | Daily Returns |
ATT Inc vs. South Star Battery
Performance |
| Timeline |
| ATT Inc |
| South Star Battery |
ATT and South Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and South Star
The main advantage of trading using opposite ATT and South Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, South Star 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 South Star will offset losses from the drop in South Star's long position.The idea behind ATT Inc and South Star Battery 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.| South Star vs. ZincX Resources Corp | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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