Correlation Between Miller Opportunity and ATT
Can any of the company-specific risk be diversified away by investing in both Miller Opportunity 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 Miller Opportunity and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Opportunity Trust and ATT Inc, you can compare the effects of market volatilities on Miller Opportunity 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 Miller Opportunity with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Opportunity and ATT.
Diversification Opportunities for Miller Opportunity and ATT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Miller and ATT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Miller Opportunity Trust and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Miller Opportunity 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 Miller Opportunity Trust 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 Miller Opportunity i.e., Miller Opportunity and ATT go up and down completely randomly.
Pair Corralation between Miller Opportunity and ATT
Assuming the 90 days horizon Miller Opportunity Trust is expected to generate 0.95 times more return on investment than ATT. However, Miller Opportunity Trust is 1.05 times less risky than ATT. It trades about 0.13 of its potential returns per unit of risk. ATT Inc is currently generating about 0.07 per unit of risk. If you would invest 2,507 in Miller Opportunity Trust on January 24, 2024 and sell it today you would earn a total of 688.00 from holding Miller Opportunity Trust or generate 27.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miller Opportunity Trust vs. ATT Inc
Performance |
| Timeline |
| Miller Opportunity Trust |
| ATT Inc |
Miller Opportunity and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miller Opportunity and ATT
The main advantage of trading using opposite Miller Opportunity and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Opportunity 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.| Miller Opportunity vs. Miller Income Fund | Miller Opportunity vs. Miller Income Fund | Miller Opportunity vs. Miller Income Fund | Miller Opportunity vs. Miller Income Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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