Correlation Between ATT and Swan Defined

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

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

Diversification Opportunities for ATT and Swan Defined

-0.51

Correlation Coefficient

ATT  Swan Defined

Excellent diversification

The 3 months correlation between ATT and Swan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of ATT i.e., ATT and Swan Defined go up and down completely randomly.

Pair Corralation between ATT and Swan Defined

Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.56 times more return on investment than Swan Defined. However, ATT is 1.56 times more volatile than Swan Defined Risk. It trades about 0.04 of its potential returns per unit of risk. Swan Defined Risk is currently generating about -0.18 per unit of risk. If you would invest  2,232  in ATT Inc on October 7, 2024 and sell it today you would earn a total of  35.00  from holding ATT Inc or generate 1.57% return on investment over 90 days.

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

ATT Inc  vs.  Swan Defined Risk

ATT Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Swan Defined Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swan Defined Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with ATT and Swan Defined

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

The idea behind ATT Inc and Swan Defined Risk 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.