Correlation Between ATT and Coin Citadel

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

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

Diversification Opportunities for ATT and Coin Citadel

-0.53

Correlation Coefficient

ATT  Coin Citadel

Excellent diversification

The 3 months correlation between ATT and Coin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Coin Citadel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin Citadel 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 Coin Citadel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin Citadel has no effect on the direction of ATT i.e., ATT and Coin Citadel go up and down completely randomly.

Pair Corralation between ATT and Coin Citadel

Taking into account the 90-day investment horizon ATT is expected to generate 2.72 times less return on investment than Coin Citadel. But when comparing it to its historical volatility, ATT Inc is 13.83 times less risky than Coin Citadel. It trades about 0.2 of its potential returns per unit of risk. Coin Citadel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Coin Citadel on December 25, 2024 and sell it today you would lose (0.01) from holding Coin Citadel or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

ATT Inc  vs.  Coin Citadel

ATT Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 15 (%) 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.

Coin Citadel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coin Citadel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Coin Citadel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATT and Coin Citadel

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

The idea behind ATT Inc and Coin Citadel 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.