Correlation Between ATT and Transat AT
Can any of the company-specific risk be diversified away by investing in both ATT and Transat AT 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 Transat AT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Transat AT, you can compare the effects of market volatilities on ATT and Transat AT 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 Transat AT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Transat AT.
Diversification Opportunities for ATT and Transat AT
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and Transat is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Transat AT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transat AT 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 Transat AT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transat AT has no effect on the direction of ATT i.e., ATT and Transat AT go up and down completely randomly.
Pair Corralation between ATT and Transat AT
If you would invest 2,202 in ATT Inc on August 31, 2024 and sell it today you would earn a total of 125.00 from holding ATT Inc or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Transat AT
Performance |
| Timeline |
| ATT Inc |
| Transat AT |
ATT and Transat AT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Transat AT
The main advantage of trading using opposite ATT and Transat AT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Transat AT 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 Transat AT will offset losses from the drop in Transat AT's long position.| ATT vs. RLJ Lodging Trust | ATT vs. Aquagold International | ATT vs. Stepstone Group | ATT vs. Morningstar Unconstrained Allocation |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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