Correlation Between ATT and Lightinthebox Holding

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

Diversification Opportunities for ATT and Lightinthebox Holding

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ATT and Lightinthebox is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Lightinthebox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightinthebox Holding 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 Lightinthebox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightinthebox Holding has no effect on the direction of ATT i.e., ATT and Lightinthebox Holding go up and down completely randomly.

Pair Corralation between ATT and Lightinthebox Holding

Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Lightinthebox Holding. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 1.11 times less risky than Lightinthebox Holding. The stock trades about -0.22 of its potential returns per unit of risk. The Lightinthebox Holding Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  109.00  in Lightinthebox Holding Co on May 19, 2022 and sell it today you would lose (10.00)  from holding Lightinthebox Holding Co or give up 9.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Lightinthebox Holding Co

 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 sluggish 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

Lightinthebox Holding 
Lightinthebox Performance
0 of 100
Over the last 90 days Lightinthebox Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Lightinthebox Price Channel

ATT and Lightinthebox Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Lightinthebox Holding

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

Lightinthebox Holding Co

Pair trading matchups for Lightinthebox Holding

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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