Correlation Between ATT and Biophytis

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

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

Diversification Opportunities for ATT and Biophytis

-0.69

Correlation Coefficient

ATT  Biophytis

Excellent diversification

The 3 months correlation between ATT and Biophytis is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Biophytis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis 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 Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis has no effect on the direction of ATT i.e., ATT and Biophytis go up and down completely randomly.

Pair Corralation between ATT and Biophytis

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.14 times more return on investment than Biophytis. However, ATT Inc is 6.97 times less risky than Biophytis. It trades about 0.13 of its potential returns per unit of risk. Biophytis is currently generating about -0.07 per unit of risk. If you would invest  1,355  in ATT Inc on September 12, 2024 and sell it today you would earn a total of  996.00  from holding ATT Inc or generate 73.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	67.61%
Values	Daily Returns

ATT Inc  vs.  Biophytis

ATT Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Biophytis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biophytis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Biophytis is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ATT and Biophytis

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

The idea behind ATT Inc and Biophytis 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.