Correlation Between Bank First and ATT

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

Diversification Opportunities for Bank First and ATT

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Bank First and ATT is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Bank First 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 Bank First National 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 Bank First i.e., Bank First and ATT go up and down completely randomly.

Pair Corralation between Bank First and ATT

Considering the 90-day investment horizon Bank First National is expected to generate 0.68 times more return on investment than ATT. However, Bank First National is 1.46 times less risky than ATT. It trades about 0.03 of its potential returns per unit of risk. ATT Inc is currently generating about -0.33 per unit of risk. If you would invest  7,600  in Bank First National on May 11, 2022 and sell it today you would earn a total of  61.00  from holding Bank First National or generate 0.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Bank First National  vs.  ATT Inc

 Performance (%) 
       Timeline  
Bank First National 
Bank First Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Bank First may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Bank First 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 comparatively stable basic indicators, ATT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ATT Price Channel

Bank First and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank First and ATT

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

Bank First National

Pair trading matchups for Bank First

The idea behind Bank First National 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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