Correlation Between ATT and IShares Future

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

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

Diversification Opportunities for ATT and IShares Future

0.71

Correlation Coefficient

ATT  IShares Future

Poor diversification

The 3 months correlation between ATT and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and iShares Future AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Future AI 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 IShares Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Future AI has no effect on the direction of ATT i.e., ATT and IShares Future go up and down completely randomly.

Pair Corralation between ATT and IShares Future

Taking into account the 90-day investment horizon ATT is expected to generate 1.16 times less return on investment than IShares Future. But when comparing it to its historical volatility, ATT Inc is 1.14 times less risky than IShares Future. It trades about 0.16 of its potential returns per unit of risk. iShares Future AI is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,234  in iShares Future AI on September 3, 2024 and sell it today you would earn a total of  472.00  from holding iShares Future AI or generate 14.59% return on investment over 90 days.

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

ATT Inc  vs.  iShares Future AI

ATT Inc

Risk-Adjusted Performance

12 of 100

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. In spite of comparatively unfluctuating basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

iShares Future AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Future AI are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, IShares Future showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATT and IShares Future

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

The idea behind ATT Inc and iShares Future AI 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.