Correlation Between Apple and ATT

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

Diversification Opportunities for Apple and ATT

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Apple and ATT is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Apple 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 Apple 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 Apple i.e., Apple and ATT go up and down completely randomly.

Pair Corralation between Apple and ATT

Given the investment horizon of 90 days Apple Inc is expected to under-perform the ATT. In addition to that, Apple is 1.61 times more volatile than ATT Inc. It trades about -0.09 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.12 per unit of volatility. If you would invest  1,679  in ATT Inc on July 7, 2022 and sell it today you would lose (70.00)  from holding ATT Inc or give up 4.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  ATT Inc

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
0 of 100
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Apple is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Apple 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 conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in November 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ATT Price Channel

Apple and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and ATT

The main advantage of trading using opposite Apple and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.
Apple vs. Amazon Inc
The idea behind Apple 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. Amazon 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 CEO Directory module to screen CEOs from public companies around the world.

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