Correlation Between ATT and Bank First

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

Diversification Opportunities for ATT and Bank First

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between ATT and Bank First is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Bank First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank First National and ATT 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 ATT Inc are associated (or correlated) with Bank First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank First National has no effect on the direction of ATT i.e., ATT and Bank First go up and down completely randomly.

Pair Corralation between ATT and Bank First

Taking into account the 90-day investment horizon ATT is expected to generate 34.06 times less return on investment than Bank First. But when comparing it to its historical volatility, ATT Inc is 1.02 times less risky than Bank First. It trades about 0.0 of its potential returns per unit of risk. Bank First National is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,179  in Bank First National on May 13, 2022 and sell it today you would earn a total of  1,499  from holding Bank First National or generate 24.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Bank First National

 Performance (%) 
       Timeline  
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 weak 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

Bank First National 
Bank First Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 8 (%) 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 and Bank First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Bank First

The main advantage of trading using opposite ATT and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Bank First 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 Bank First will offset losses from the drop in Bank First's long position.
The idea behind ATT Inc and Bank First National 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.

Bank First National

Pair trading matchups for Bank First

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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