Correlation Between Ameriwest Lithium and ATT

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

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

Diversification Opportunities for Ameriwest Lithium and ATT

-0.71

Correlation Coefficient

Ameriwest Lithium  ATT

Pay attention - limited upside

The 3 months correlation between Ameriwest and ATT is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ameriwest Lithium and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Ameriwest Lithium 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 Ameriwest Lithium 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 Ameriwest Lithium i.e., Ameriwest Lithium and ATT go up and down completely randomly.

Pair Corralation between Ameriwest Lithium and ATT

Assuming the 90 days horizon Ameriwest Lithium is expected to under-perform the ATT. In addition to that, Ameriwest Lithium is 5.39 times more volatile than ATT Inc. It trades about -0.01 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of volatility. If you would invest  1,703  in ATT Inc on September 2, 2024 and sell it today you would earn a total of  613.00  from holding ATT Inc or generate 36.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ameriwest Lithium  vs.  ATT Inc

Ameriwest Lithium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameriwest Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ATT Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriwest Lithium and ATT

The main advantage of trading using opposite Ameriwest Lithium and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriwest Lithium 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 Ameriwest Lithium 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.