Correlation Between ATT and OM Holdings

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

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

Diversification Opportunities for ATT and OM Holdings

0.0

Correlation Coefficient

ATT  OM Holdings

Pay attention - limited upside

The 3 months correlation between ATT and OMHLF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and OM Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OM Holdings Limited 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 OM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OM Holdings Limited has no effect on the direction of ATT i.e., ATT and OM Holdings go up and down completely randomly.

Pair Corralation between ATT and OM Holdings

If you would invest  2,267  in ATT Inc on December 26, 2024 and sell it today you would earn a total of  464.00  from holding ATT Inc or generate 20.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ATT Inc  vs.  OM Holdings Limited

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.

OM Holdings Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days OM Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, OM Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ATT and OM Holdings

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

The idea behind ATT Inc and OM Holdings Limited 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.