Correlation Between Huntington Ingalls and ATT

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

Diversification Opportunities for Huntington Ingalls and ATT

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Huntington and ATT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Huntington Ingalls 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 Huntington Ingalls Industries 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 Huntington Ingalls i.e., Huntington Ingalls and ATT go up and down completely randomly.

Pair Corralation between Huntington Ingalls and ATT

Considering the 90-day investment horizon Huntington Ingalls is expected to generate 16.5 times less return on investment than ATT. In addition to that, Huntington Ingalls is 1.23 times more volatile than ATT Inc. It trades about 0.02 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.35 per unit of volatility. If you would invest  1,490  in ATT Inc on September 10, 2022 and sell it today you would earn a total of  422.00  from holding ATT Inc or generate 28.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Huntington Ingalls Industries  vs.  ATT Inc

 Performance (%) 
       Timeline  
Huntington Ingalls 
Huntington Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Huntington Ingalls is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Huntington Price Channel

ATT Inc 
ATT Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2023.

ATT Price Channel

Huntington Ingalls and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Huntington Ingalls and ATT

The main advantage of trading using opposite Huntington Ingalls and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls 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.
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The idea behind Huntington Ingalls Industries 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.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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