Correlation Between Blue Moon and ATT

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

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

Diversification Opportunities for Blue Moon and ATT

0.35

Correlation Coefficient

Blue Moon  ATT

Weak diversification

The 3 months correlation between Blue and ATT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Blue Moon 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 Blue Moon Metals 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 Blue Moon i.e., Blue Moon and ATT go up and down completely randomly.

Pair Corralation between Blue Moon and ATT

Assuming the 90 days horizon Blue Moon Metals is expected to generate 73.39 times more return on investment than ATT. However, Blue Moon is 73.39 times more volatile than ATT Inc. It trades about 0.13 of its potential returns per unit of risk. ATT Inc is currently generating about 0.21 per unit of risk. If you would invest  25.00  in Blue Moon Metals on December 26, 2024 and sell it today you would earn a total of  225.00  from holding Blue Moon Metals or generate 900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Blue Moon Metals  vs.  ATT Inc

Blue Moon Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

ATT Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Moon and ATT

The main advantage of trading using opposite Blue Moon and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Moon 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 Blue Moon Metals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.