Correlation Between Amazon and ATT

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Amazon and ATT 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 Amazon and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and ATT Inc, you can compare the effects of market volatilities on Amazon and ATT 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 Amazon with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and ATT.

Diversification Opportunities for Amazon and ATT

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amazon and ATT is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Amazon 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 Amazon Inc are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Amazon i.e., Amazon and ATT go up and down completely randomly.

Pair Corralation between Amazon and ATT

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the ATT. In addition to that, Amazon is 1.96 times more volatile than ATT Inc. It trades about -0.11 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.28 per unit of volatility. If you would invest  1,562  in ATT Inc on September 2, 2022 and sell it today you would earn a total of  357.00  from holding ATT Inc or generate 22.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  ATT Inc

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

ATT Inc 
ATT Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

ATT Price Channel

Amazon and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and ATT

The main advantage of trading using opposite Amazon and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
Amazon vs. Merck Company
Amazon vs. Walmart
Amazon vs. Chevron Corp
Amazon vs. Verizon Communications
The idea behind Amazon Inc and ATT Inc 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.
ATT vs. 3M Company
ATT vs. Coca-Cola Co
ATT vs. Microsoft
ATT vs. Cisco Systems
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go