Correlation Between ATT and Banco Macro

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

Diversification Opportunities for ATT and Banco Macro

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between ATT and Banco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA 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 Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of ATT i.e., ATT and Banco Macro go up and down completely randomly.

Pair Corralation between ATT and Banco Macro

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.37 times more return on investment than Banco Macro. However, ATT Inc is 2.69 times less risky than Banco Macro. It trades about 0.2 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.09 per unit of risk. If you would invest  1,832  in ATT Inc on September 5, 2022 and sell it today you would earn a total of  70.00  from holding ATT Inc or generate 3.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Banco Macro SA

 Performance (%) 
       Timeline  
ATT Inc 
ATT Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

ATT Price Channel

Banco Macro SA 
Banco Performance
0 of 100
Over the last 90 days Banco Macro SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Banco Macro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Banco Price Channel

ATT and Banco Macro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Banco Macro

The main advantage of trading using opposite ATT and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.
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The idea behind ATT Inc and Banco Macro SA 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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