Correlation Between ATT and Portmeirion Group

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

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

Diversification Opportunities for ATT and Portmeirion Group

0.88

Correlation Coefficient

ATT  Portmeirion Group

Very poor diversification

The 3 months correlation between ATT and Portmeirion is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Portmeirion Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portmeirion Group PLC 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 Portmeirion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portmeirion Group PLC has no effect on the direction of ATT i.e., ATT and Portmeirion Group go up and down completely randomly.

Pair Corralation between ATT and Portmeirion Group

Taking into account the 90-day investment horizon ATT Inc is expected to generate 12.71 times more return on investment than Portmeirion Group. However, ATT is 12.71 times more volatile than Portmeirion Group PLC. It trades about 0.12 of its potential returns per unit of risk. Portmeirion Group PLC is currently generating about 0.17 per unit of risk. If you would invest  2,150  in ATT Inc on September 17, 2024 and sell it today you would earn a total of  213.00  from holding ATT Inc or generate 9.91% return on investment over 90 days.

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

ATT Inc  vs.  Portmeirion Group PLC

ATT Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Portmeirion Group PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Portmeirion Group PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Portmeirion Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ATT and Portmeirion Group

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

The idea behind ATT Inc and Portmeirion Group PLC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.