Correlation Between One Choice and ATT

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

Diversification Opportunities for One Choice and ATT

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between AAAJX and ATT is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding One Choice Blend and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and One Choice 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 One Choice Blend 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 One Choice i.e., One Choice and ATT go up and down completely randomly.

Pair Corralation between One Choice and ATT

Assuming the 90 days horizon One Choice Blend is expected to generate 0.31 times more return on investment than ATT. However, One Choice Blend is 3.18 times less risky than ATT. It trades about 0.25 of its potential returns per unit of risk. ATT Inc is currently generating about -0.06 per unit of risk. If you would invest  898.00  in One Choice Blend on May 16, 2022 and sell it today you would earn a total of  52.00  from holding One Choice Blend or generate 5.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

One Choice Blend  vs.  ATT Inc

 Performance (%) 
       Timeline  
One Choice Blend 
AAAJX Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in One Choice Blend are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, One Choice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AAAJX Price Channel

ATT Inc 
ATT Performance
0 of 100
Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

ATT Price Channel

One Choice and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with One Choice and ATT

The main advantage of trading using opposite One Choice and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Choice 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.

One Choice Blend

Pair trading matchups for One Choice

The idea behind One Choice Blend 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.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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