Correlation Between ATT and First Watch

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

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

Diversification Opportunities for ATT and First Watch

-0.19

Correlation Coefficient

ATT  First Watch

Good diversification

The 3 months correlation between ATT and First is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and First Watch Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Watch Restaurant 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 First Watch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Watch Restaurant has no effect on the direction of ATT i.e., ATT and First Watch go up and down completely randomly.

Pair Corralation between ATT and First Watch

Given the investment horizon of 90 days ATT Inc is expected to generate 0.22 times more return on investment than First Watch. However, ATT Inc is 4.61 times less risky than First Watch. It trades about 0.15 of its potential returns per unit of risk. First Watch Restaurant is currently generating about -0.06 per unit of risk. If you would invest  1,926  in ATT Inc on July 4, 2025 and sell it today you would earn a total of  95.00  from holding ATT Inc or generate 4.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ATT Inc  vs.  First Watch Restaurant

ATT Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ATT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

First Watch Restaurant

Risk-Adjusted Performance

Weakest

Over the last 90 days First Watch Restaurant has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ATT and First Watch

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

The idea behind ATT Inc and First Watch Restaurant 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.