Correlation Between Mechel OAO and ATT
Can any of the company-specific risk be diversified away by investing in both Mechel OAO 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 Mechel OAO and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechel OAO and ATT Inc, you can compare the effects of market volatilities on Mechel OAO 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 Mechel OAO with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechel OAO and ATT.
Diversification Opportunities for Mechel OAO and ATT
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mechel and ATT is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mechel OAO and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Mechel OAO 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 Mechel OAO 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 Mechel OAO i.e., Mechel OAO and ATT go up and down completely randomly.
Pair Corralation between Mechel OAO and ATT
Considering the 90-day investment horizon Mechel OAO is expected to under-perform the ATT. In addition to that, Mechel OAO is 9.64 times more volatile than ATT Inc. It trades about -0.15 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.01 per unit of volatility. If you would invest 1,654 in ATT Inc on January 24, 2024 and sell it today you would lose (4.00) from holding ATT Inc or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 11.86% |
| Values | Daily Returns |
Mechel OAO vs. ATT Inc
Performance |
| Timeline |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ATT Inc |
Mechel OAO and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechel OAO and ATT
The main advantage of trading using opposite Mechel OAO and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechel OAO 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.| Mechel OAO vs. Mill City Ventures | Mechel OAO vs. Valens | Mechel OAO vs. Entegris | Mechel OAO vs. PennantPark Floating Rate |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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