Correlation Between ATT and Nokia

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

By analyzing existing cross correlation between ATT Inc and Nokia 6625 percent, you can compare the effects of market volatilities on ATT and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Nokia.

Diversification Opportunities for ATT and Nokia

0.2

Correlation Coefficient

ATT  Nokia

Modest diversification

The 3 months correlation between ATT and Nokia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Nokia 6625 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 6625 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia 6625 percent has no effect on the direction of ATT i.e., ATT and Nokia go up and down completely randomly.

Pair Corralation between ATT and Nokia

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.92 times more return on investment than Nokia. However, ATT Inc is 1.09 times less risky than Nokia. It trades about 0.26 of its potential returns per unit of risk. Nokia 6625 percent is currently generating about 0.0 per unit of risk. If you would invest  2,232  in ATT Inc on December 29, 2024 and sell it today you would earn a total of  588.00  from holding ATT Inc or generate 26.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

ATT Inc  vs.  Nokia 6625 percent

ATT Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 20 (%) 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.

Nokia 6625 percent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nokia 6625 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nokia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATT and Nokia

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

The idea behind ATT Inc and Nokia 6625 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.