Correlation Between ATT and Telecom Argentina

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

By analyzing existing cross correlation between ATT Inc and Telecom Argentina SA, you can compare the effects of market volatilities on ATT and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Telecom Argentina.

Diversification Opportunities for ATT and Telecom Argentina

0.27

Correlation Coefficient

ATT  Telecom Argentina

Modest diversification

The 3 months correlation between ATT and Telecom is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of ATT i.e., ATT and Telecom Argentina go up and down completely randomly.

Pair Corralation between ATT and Telecom Argentina

Assuming the 90 days trading horizon ATT Inc is expected to generate 0.29 times more return on investment than Telecom Argentina. However, ATT Inc is 3.41 times less risky than Telecom Argentina. It trades about -0.05 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about -0.02 per unit of risk. If you would invest  2,324  in ATT Inc on July 23, 2025 and sell it today you would lose (95.00) from holding ATT Inc or give up 4.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

ATT Inc  vs.  Telecom Argentina SA

ATT Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ATT is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Telecom Argentina

Risk-Adjusted Performance

Weakest

Over the last 90 days Telecom Argentina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Telecom Argentina is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ATT and Telecom Argentina

The main advantage of trading using opposite ATT and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.

The idea behind ATT Inc and Telecom Argentina SA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.