Correlation Between Addnode Group and ATT

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

By analyzing existing cross correlation between Addnode Group AB and ATT Inc, you can compare the effects of market volatilities on Addnode Group 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 Addnode Group with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addnode Group and ATT.

Diversification Opportunities for Addnode Group and ATT

0.15

Correlation Coefficient

Addnode Group  ATT

Average diversification

The 3 months correlation between Addnode and ATT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Addnode Group 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 Addnode Group AB 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 Addnode Group i.e., Addnode Group and ATT go up and down completely randomly.

Pair Corralation between Addnode Group and ATT

Assuming the 90 days trading horizon Addnode Group AB is expected to generate 1.91 times more return on investment than ATT. However, Addnode Group is 1.91 times more volatile than ATT Inc. It trades about 0.08 of its potential returns per unit of risk. ATT Inc is currently generating about 0.12 per unit of risk. If you would invest  11,112  in Addnode Group AB on February 25, 2024 and sell it today you would earn a total of  928.00  from holding Addnode Group AB or generate 8.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Addnode Group AB  vs.  ATT Inc

Addnode Group AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Addnode Group AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Addnode Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

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.

Pair Trading with Addnode Group and ATT

The main advantage of trading using opposite Addnode Group and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addnode Group 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.

The idea behind Addnode Group AB and ATT Inc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.