Correlation Between ATT and Intuit

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

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

Diversification Opportunities for ATT and Intuit

0.63

Correlation Coefficient

ATT  Intuit

Poor diversification

The 3 months correlation between ATT and Intuit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and ATT 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 ATT Inc are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of ATT i.e., ATT and Intuit go up and down completely randomly.

Pair Corralation between ATT and Intuit

Given the investment horizon of 90 days ATT Inc is expected to generate 0.83 times more return on investment than Intuit. However, ATT Inc is 1.2 times less risky than Intuit. It trades about -0.03 of its potential returns per unit of risk. Intuit Inc is currently generating about -0.14 per unit of risk. If you would invest  45,418  in ATT Inc on October 17, 2024 and sell it today you would lose (417.00) from holding ATT Inc or give up 0.92% of portfolio value over 90 days.

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

ATT Inc  vs.  Intuit Inc

ATT Inc

Risk-Adjusted Performance

5 of 100

Insignificant

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 fairly weak primary indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Intuit Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ATT and Intuit

The main advantage of trading using opposite ATT and Intuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Intuit 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 Intuit will offset losses from the drop in Intuit's long position.

The idea behind ATT Inc and Intuit 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.