Correlation Between ATT and Interpublic

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

Diversification Opportunities for ATT and Interpublic

-0.03
  Correlation Coefficient

Good diversification

The 24 months correlation between ATT and Interpublic is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Interpublic Group Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group 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 Interpublic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of ATT i.e., ATT and Interpublic go up and down completely randomly.

Pair Corralation between ATT and Interpublic

Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Interpublic. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 1.47 times less risky than Interpublic. The stock trades about -0.46 of its potential returns per unit of risk. The Interpublic Group is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest  2,833  in Interpublic Group on June 29, 2022 and sell it today you would lose (301.00)  from holding Interpublic Group or give up 10.62% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Interpublic Group Of

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

ATT Price Channel

Interpublic Group 
Interpublic Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Interpublic Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Interpublic may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Interpublic Price Channel

ATT and Interpublic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Interpublic

The main advantage of trading using opposite ATT and Interpublic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Interpublic 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 Interpublic will offset losses from the drop in Interpublic's long position.
ATT vs. Clearwater Paper Corp
The idea behind ATT Inc and Interpublic Group 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.
Interpublic vs. Clearwater Paper Corp
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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