Correlation Between ATT and Hawesko Holding

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Can any of the company-specific risk be diversified away by investing in both ATT and Hawesko Holding 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 Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Hawesko Holding AG, you can compare the effects of market volatilities on ATT and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Hawesko Holding.

Diversification Opportunities for ATT and Hawesko Holding

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between ATT and Hawesko is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of ATT i.e., ATT and Hawesko Holding go up and down completely randomly.

Pair Corralation between ATT and Hawesko Holding

Assuming the 90 days trading horizon ATT Inc is expected to generate 0.63 times more return on investment than Hawesko Holding. However, ATT Inc is 1.6 times less risky than Hawesko Holding. It trades about 0.13 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about 0.0 per unit of risk. If you would invest  1,431  in ATT Inc on September 27, 2024 and sell it today you would earn a total of  751.00  from holding ATT Inc or generate 52.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Hawesko Holding AG

 Performance 
       Timeline  
ATT Inc 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, ATT reported solid returns over the last few months and may actually be approaching a breakup point.
Hawesko Holding AG 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hawesko Holding AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hawesko Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ATT and Hawesko Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Hawesko Holding

The main advantage of trading using opposite ATT and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.
The idea behind ATT Inc and Hawesko Holding AG 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.
Check out your portfolio center.
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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