Correlation Between ATT and Playtech PLC

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

Diversification Opportunities for ATT and Playtech PLC

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between ATT and Playtech is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Playtech PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech PLC ADR 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 Playtech PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech PLC ADR has no effect on the direction of ATT i.e., ATT and Playtech PLC go up and down completely randomly.

Pair Corralation between ATT and Playtech PLC

If you would invest  2,158  in ATT Inc on August 9, 2024 and sell it today you would earn a total of  74.00  from holding ATT Inc or generate 3.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Playtech PLC ADR

 Performance 
       Timeline  
ATT Inc 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.
Playtech PLC ADR 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Playtech PLC ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Playtech PLC showed solid returns over the last few months and may actually be approaching a breakup point.

ATT and Playtech PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Playtech PLC

The main advantage of trading using opposite ATT and Playtech PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Playtech PLC 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 Playtech PLC will offset losses from the drop in Playtech PLC's long position.
The idea behind ATT Inc and Playtech PLC ADR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets