Correlation Between ATT and MicroSectors Gold
Can any of the company-specific risk be diversified away by investing in both ATT and MicroSectors Gold 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 MicroSectors Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and MicroSectors Gold Miners, you can compare the effects of market volatilities on ATT and MicroSectors Gold 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 MicroSectors Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and MicroSectors Gold.
Diversification Opportunities for ATT and MicroSectors Gold
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and MicroSectors is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and MicroSectors Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Gold Miners 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 MicroSectors Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Gold Miners has no effect on the direction of ATT i.e., ATT and MicroSectors Gold go up and down completely randomly.
Pair Corralation between ATT and MicroSectors Gold
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.15 times more return on investment than MicroSectors Gold. However, ATT Inc is 6.8 times less risky than MicroSectors Gold. It trades about -0.09 of its potential returns per unit of risk. MicroSectors Gold Miners is currently generating about -0.04 per unit of risk. If you would invest 2,634 in ATT Inc on August 18, 2025 and sell it today you would lose (75.00) from holding ATT Inc or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. MicroSectors Gold Miners
Performance |
| Timeline |
| ATT Inc |
| MicroSectors Gold Miners |
ATT and MicroSectors Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and MicroSectors Gold
The main advantage of trading using opposite ATT and MicroSectors Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, MicroSectors Gold 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 MicroSectors Gold will offset losses from the drop in MicroSectors Gold's long position.The idea behind ATT Inc and MicroSectors Gold Miners 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.| MicroSectors Gold vs. Direxion Daily Gold | MicroSectors Gold vs. IQ Hedge Multi Strategy | MicroSectors Gold vs. Direxion Daily Regional | MicroSectors Gold vs. Invesco Dividend Achievers |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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