Correlation Between ATT and IQ 50

Can any of the company-specific risk be diversified away by investing in both ATT and IQ 50 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 IQ 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATT Inc and IQ 50 Percent, you can compare the effects of market volatilities on ATT and IQ 50 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 IQ 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and IQ 50.

Diversification Opportunities for ATT and IQ 50

0.93

Correlation Coefficient

ATT  IQ 50

Almost no diversification

The 3 months correlation between ATT and HFXI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and IQ 50 Percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 50 Percent 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 IQ 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 50 Percent has no effect on the direction of ATT i.e., ATT and IQ 50 go up and down completely randomly.

Pair Corralation between ATT and IQ 50

Taking into account the 90-day investment horizon ATT Inc is expected to generate 2.03 times more return on investment than IQ 50. However, ATT is 2.03 times more volatile than IQ 50 Percent. It trades about 0.2 of its potential returns per unit of risk. IQ 50 Percent is currently generating about 0.16 per unit of risk. If you would invest  2,267  in ATT Inc on December 25, 2024 and sell it today you would earn a total of  429.00  from holding ATT Inc or generate 18.92% return on investment over 90 days.

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

ATT Inc  vs.  IQ 50 Percent

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.

IQ 50 Percent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IQ 50 Percent are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, IQ 50 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ATT and IQ 50

The main advantage of trading using opposite ATT and IQ 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, IQ 50 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 IQ 50 will offset losses from the drop in IQ 50's long position.

The idea behind ATT Inc and IQ 50 Percent 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.