Correlation Between ATT and Niu Technologies

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

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

Diversification Opportunities for ATT and Niu Technologies

0.11

Correlation Coefficient

ATT  Niu Technologies

Average diversification

The 3 months correlation between ATT and Niu is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies 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 Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of ATT i.e., ATT and Niu Technologies go up and down completely randomly.

Pair Corralation between ATT and Niu Technologies

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.33 times more return on investment than Niu Technologies. However, ATT Inc is 3.01 times less risky than Niu Technologies. It trades about 0.0 of its potential returns per unit of risk. Niu Technologies is currently generating about -0.03 per unit of risk. If you would invest  1,842  in ATT Inc on February 26, 2024 and sell it today you would lose (92.00) from holding ATT Inc or give up 4.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ATT Inc  vs.  Niu Technologies

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 June 2024.

Niu Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Niu Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, Niu Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATT and Niu Technologies

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

The idea behind ATT Inc and Niu Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.