Correlation Between C3 Metals and ATT

Can any of the company-specific risk be diversified away by investing in both C3 Metals 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 C3 Metals and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C3 Metals and ATT Inc, you can compare the effects of market volatilities on C3 Metals 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 C3 Metals with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of C3 Metals and ATT.

Diversification Opportunities for C3 Metals and ATT

0.88

Correlation Coefficient

C3 Metals  ATT

Very poor diversification

The 3 months correlation between CUAUF and ATT is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding C3 Metals and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and C3 Metals 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 C3 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 C3 Metals i.e., C3 Metals and ATT go up and down completely randomly.

Pair Corralation between C3 Metals and ATT

Assuming the 90 days horizon C3 Metals is expected to generate 6.81 times more return on investment than ATT. However, C3 Metals is 6.81 times more volatile than ATT Inc. It trades about 0.18 of its potential returns per unit of risk. ATT Inc is currently generating about 0.21 per unit of risk. If you would invest  17.00  in C3 Metals on December 26, 2024 and sell it today you would earn a total of  25.00  from holding C3 Metals or generate 147.06% return on investment over 90 days.

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

C3 Metals  vs.  ATT Inc

C3 Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in C3 Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, C3 Metals 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 C3 Metals and ATT

The main advantage of trading using opposite C3 Metals and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C3 Metals 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 C3 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.