Correlation Between ATT and Noble Romans

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

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

Diversification Opportunities for ATT and Noble Romans

-0.12

Correlation Coefficient

ATT  Noble Romans

Good diversification

The 3 months correlation between ATT and Noble is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Noble Romans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Romans 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 Noble Romans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Romans has no effect on the direction of ATT i.e., ATT and Noble Romans go up and down completely randomly.

Pair Corralation between ATT and Noble Romans

Taking into account the 90-day investment horizon ATT is expected to generate 2.61 times less return on investment than Noble Romans. But when comparing it to its historical volatility, ATT Inc is 4.98 times less risky than Noble Romans. It trades about 0.2 of its potential returns per unit of risk. Noble Romans is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Noble Romans on September 13, 2024 and sell it today you would earn a total of  4.00  from holding Noble Romans or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

ATT Inc  vs.  Noble Romans

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 uncertain basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Noble Romans

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Noble Romans are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Noble Romans displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATT and Noble Romans

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

The idea behind ATT Inc and Noble Romans 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..