Correlation Between Axiata Group and ATT

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

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

Diversification Opportunities for Axiata Group and ATT

-0.55

Correlation Coefficient

Axiata Group  ATT

Excellent diversification

The 3 months correlation between Axiata and ATT is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Axiata Group Berhad and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Axiata Group 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 Axiata Group Berhad 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 Axiata Group i.e., Axiata Group and ATT go up and down completely randomly.

Pair Corralation between Axiata Group and ATT

If you would invest  2,158  in ATT Inc on October 8, 2024 and sell it today you would earn a total of  109.00  from holding ATT Inc or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Axiata Group Berhad  vs.  ATT Inc

Axiata Group Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axiata Group Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Axiata Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ATT Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Axiata Group and ATT

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

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 the Bonds Directory module to find actively traded corporate debentures issued by US companies.