Correlation Between ATT and Short Oil
Can any of the company-specific risk be diversified away by investing in both ATT and Short Oil 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 Short Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Short Oil Gas, you can compare the effects of market volatilities on ATT and Short Oil 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 Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Short Oil.
Diversification Opportunities for ATT and Short Oil
Good diversification
The 3 months correlation between ATT and Short is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas 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 Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of ATT i.e., ATT and Short Oil go up and down completely randomly.
Pair Corralation between ATT and Short Oil
Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Short Oil. In addition to that, ATT is 1.12 times more volatile than Short Oil Gas. It trades about -0.03 of its total potential returns per unit of risk. Short Oil Gas is currently generating about -0.01 per unit of volatility. If you would invest 1,426 in Short Oil Gas on July 20, 2025 and sell it today you would lose (14.00) from holding Short Oil Gas or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Short Oil Gas
Performance |
| Timeline |
| ATT Inc |
| Short Oil Gas |
ATT and Short Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Short Oil
The main advantage of trading using opposite ATT and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.The idea behind ATT Inc and Short Oil Gas 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.| Short Oil vs. Fuller Thaler Behavioral | Short Oil vs. Touchstone Funds Group | Short Oil vs. The National Tax Free | Short Oil vs. Fulcrum Diversified Absolute |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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