Correlation Between ATT and GOODYEAR
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By analyzing existing cross correlation between ATT Inc and GOODYEAR TIRE RUBR, you can compare the effects of market volatilities on ATT and GOODYEAR 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 GOODYEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and GOODYEAR.
Diversification Opportunities for ATT and GOODYEAR
Good diversification
The 3 months correlation between ATT and GOODYEAR is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and GOODYEAR TIRE RUBR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR TIRE RUBR 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 GOODYEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR TIRE RUBR has no effect on the direction of ATT i.e., ATT and GOODYEAR go up and down completely randomly.
Pair Corralation between ATT and GOODYEAR
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.69 times more return on investment than GOODYEAR. However, ATT Inc is 1.46 times less risky than GOODYEAR. It trades about 0.14 of its potential returns per unit of risk. GOODYEAR TIRE RUBR is currently generating about 0.02 per unit of risk. If you would invest 2,254 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 62.00 from holding ATT Inc or generate 2.75% 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. GOODYEAR TIRE RUBR
Performance |
| Timeline |
| ATT Inc |
| GOODYEAR TIRE RUBR |
ATT and GOODYEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and GOODYEAR
The main advantage of trading using opposite ATT and GOODYEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, GOODYEAR 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 GOODYEAR will offset losses from the drop in GOODYEAR's long position.The idea behind ATT Inc and GOODYEAR TIRE RUBR 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.| GOODYEAR vs. Grupo Televisa SAB | GOODYEAR vs. Thor Industries | GOODYEAR vs. Marine Products | GOODYEAR vs. BCE Inc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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