Correlation Between Savannah Resources and ATT

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

By analyzing existing cross correlation between Savannah Resources Plc and ATT Inc, you can compare the effects of market volatilities on Savannah Resources and ATT 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 Savannah Resources with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savannah Resources and ATT.

Diversification Opportunities for Savannah Resources and ATT

-0.25

Correlation Coefficient

Savannah Resources  ATT

Very good diversification

The 3 months correlation between Savannah and ATT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Savannah Resources Plc and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Savannah Resources 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 Savannah Resources Plc are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Savannah Resources i.e., Savannah Resources and ATT go up and down completely randomly.

Pair Corralation between Savannah Resources and ATT

Assuming the 90 days horizon Savannah Resources Plc is expected to under-perform the ATT. In addition to that, Savannah Resources is 5.54 times more volatile than ATT Inc. It trades about -0.01 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.15 per unit of volatility. If you would invest  2,031  in ATT Inc on September 4, 2024 and sell it today you would earn a total of  239.00  from holding ATT Inc or generate 11.77% return on investment over 90 days.

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

Savannah Resources Plc  vs.  ATT Inc

Savannah Resources Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Savannah Resources Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Savannah Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ATT Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 11 (%) 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.

Pair Trading with Savannah Resources and ATT

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

The idea behind Savannah Resources Plc and ATT Inc 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.