Correlation Between ATT and Otc Markets

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

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

Diversification Opportunities for ATT and Otc Markets

-0.66

Correlation Coefficient

ATT  Otc Markets

Excellent diversification

The 3 months correlation between ATT and Otc is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Otc Markets Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otc Markets Group 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 Otc Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otc Markets Group has no effect on the direction of ATT i.e., ATT and Otc Markets go up and down completely randomly.

Pair Corralation between ATT and Otc Markets

Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.21 times more return on investment than Otc Markets. However, ATT is 1.21 times more volatile than Otc Markets Group. It trades about 0.18 of its potential returns per unit of risk. Otc Markets Group is currently generating about -0.16 per unit of risk. If you would invest  2,255  in ATT Inc on December 16, 2024 and sell it today you would earn a total of  403.00  from holding ATT Inc or generate 17.87% return on investment over 90 days.

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

ATT Inc  vs.  Otc Markets Group

ATT Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Otc Markets Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Otc Markets Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ATT and Otc Markets

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

The idea behind ATT Inc and Otc Markets Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..