Correlation Between ATT and Precious Metals
Can any of the company-specific risk be diversified away by investing in both ATT and Precious Metals 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 Precious Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Precious Metals Ultrasector, you can compare the effects of market volatilities on ATT and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Precious Metals.
Diversification Opportunities for ATT and Precious Metals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and Precious is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Precious Metals Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals Ultr 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals Ultr has no effect on the direction of ATT i.e., ATT and Precious Metals go up and down completely randomly.
Pair Corralation between ATT and Precious Metals
Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Precious Metals. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 3.2 times less risky than Precious Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Precious Metals Ultrasector is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 8,860 in Precious Metals Ultrasector on July 24, 2025 and sell it today you would earn a total of 4,563 from holding Precious Metals Ultrasector or generate 51.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Precious Metals Ultrasector
Performance |
| Timeline |
| ATT Inc |
| Precious Metals Ultr |
ATT and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Precious Metals
The main advantage of trading using opposite ATT and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.The idea behind ATT Inc and Precious Metals Ultrasector 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.| Precious Metals vs. Hsbc Treasury Money | Precious Metals vs. Aig Government Money | Precious Metals vs. Voya Government Money | Precious Metals vs. Tiaa Cref Life Money |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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