Correlation Between Wetzel SA and ATT
Can any of the company-specific risk be diversified away by investing in both Wetzel SA and ATT 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 Wetzel SA and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wetzel SA and ATT Inc, you can compare the effects of market volatilities on Wetzel SA and ATT 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 Wetzel SA with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wetzel SA and ATT.
Diversification Opportunities for Wetzel SA and ATT
Very weak diversification
The 3 months correlation between Wetzel and ATT is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wetzel SA and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Wetzel SA 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 Wetzel SA are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Wetzel SA i.e., Wetzel SA and ATT go up and down completely randomly.
Pair Corralation between Wetzel SA and ATT
Assuming the 90 days trading horizon Wetzel SA is expected to under-perform the ATT. In addition to that, Wetzel SA is 2.27 times more volatile than ATT Inc. It trades about -0.06 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of volatility. If you would invest 1,460 in ATT Inc on January 25, 2024 and sell it today you would earn a total of 222.00 from holding ATT Inc or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.12% |
| Values | Daily Returns |
Wetzel SA vs. ATT Inc
Performance |
| Timeline |
| Wetzel SA |
| ATT Inc |
Wetzel SA and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wetzel SA and ATT
The main advantage of trading using opposite Wetzel SA and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wetzel SA position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Wetzel SA vs. Recrusul SA | Wetzel SA vs. Mangels Industrial SA | Wetzel SA vs. Inepar SA Indstria | Wetzel SA vs. Lupatech SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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