Correlation Between ATT and Comcast Corp

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

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

Diversification Opportunities for ATT and Comcast Corp

0.75

Correlation Coefficient

ATT  Comcast Corp

Poor diversification

The 3 months correlation between ATT and Comcast is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of ATT i.e., ATT and Comcast Corp go up and down completely randomly.

Pair Corralation between ATT and Comcast Corp

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.84 times more return on investment than Comcast Corp. However, ATT Inc is 1.18 times less risky than Comcast Corp. It trades about 0.16 of its potential returns per unit of risk. Comcast Corp is currently generating about 0.11 per unit of risk. If you would invest  2,017  in ATT Inc on September 3, 2024 and sell it today you would earn a total of  253.00  from holding ATT Inc or generate 12.54% 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.  Comcast Corp

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.

Comcast Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comcast Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Comcast Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ATT and Comcast Corp

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

The idea behind ATT Inc and Comcast Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.