Correlation Between ATT and FundX Investment

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

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

Diversification Opportunities for ATT and FundX Investment

-0.43

Correlation Coefficient

ATT  FundX Investment

Very good diversification

The 3 months correlation between ATT and FundX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment Trust 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 FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of ATT i.e., ATT and FundX Investment go up and down completely randomly.

Pair Corralation between ATT and FundX Investment

Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.78 times more return on investment than FundX Investment. However, ATT is 1.78 times more volatile than FundX Investment Trust. It trades about 0.2 of its potential returns per unit of risk. FundX Investment Trust is currently generating about -0.12 per unit of risk. If you would invest  2,267  in ATT Inc on December 25, 2024 and sell it today you would earn a total of  429.00  from holding ATT Inc or generate 18.92% 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.  FundX Investment Trust

ATT Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 15 (%) 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.

FundX Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days FundX Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with ATT and FundX Investment

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

The idea behind ATT Inc and FundX Investment Trust 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.