Correlation Between Ford and ATT

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ATT Inc, you can compare the effects of market volatilities on Ford 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 Ford with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ATT.

Diversification Opportunities for Ford and ATT

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Ford and ATT is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Ford 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 Ford Motor 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 Ford i.e., Ford and ATT go up and down completely randomly.

Pair Corralation between Ford and ATT

Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.91 times more return on investment than ATT. However, Ford is 1.91 times more volatile than ATT Inc. It trades about 0.07 of its potential returns per unit of risk. ATT Inc is currently generating about -0.2 per unit of risk. If you would invest  1,214  in Ford Motor on December 4, 2023 and sell it today you would earn a total of  31.00  from holding Ford Motor or generate 2.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ford Motor  vs.  ATT Inc

 Performance 
       Timeline  
Ford Motor 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Ford reported solid returns over the last few months and may actually be approaching a breakup point.
ATT Inc 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Ford and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ford and ATT

The main advantage of trading using opposite Ford and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Money Managers
Screen money managers from public funds and ETFs managed around the world
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio