Correlation Between Playmates Toys and ATT

Can any of the company-specific risk be diversified away by investing in both Playmates Toys 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 Playmates Toys and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Playmates Toys Limited and ATT Inc, you can compare the effects of market volatilities on Playmates Toys 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 Playmates Toys with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and ATT.

Diversification Opportunities for Playmates Toys and ATT

-0.62

Correlation Coefficient

Playmates Toys  ATT

Excellent diversification

The 3 months correlation between Playmates and ATT is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Playmates Toys 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 Playmates Toys Limited 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 Playmates Toys i.e., Playmates Toys and ATT go up and down completely randomly.

Pair Corralation between Playmates Toys and ATT

Assuming the 90 days horizon Playmates Toys is expected to generate 1.07 times less return on investment than ATT. In addition to that, Playmates Toys is 5.1 times more volatile than ATT Inc. It trades about 0.02 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.1 per unit of volatility. If you would invest  2,024  in ATT Inc on October 24, 2024 and sell it today you would earn a total of  142.00  from holding ATT Inc or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Playmates Toys Limited  vs.  ATT Inc

Playmates Toys

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playmates Toys Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Playmates Toys may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ATT Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Playmates Toys and ATT

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

The idea behind Playmates Toys Limited 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.

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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 the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.