Correlation Between ATT and Design Therapeutics

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

Diversification Opportunities for ATT and Design Therapeutics

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between ATT and Design is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Design Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design Therapeutics 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 Design Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design Therapeutics has no effect on the direction of ATT i.e., ATT and Design Therapeutics go up and down completely randomly.

Pair Corralation between ATT and Design Therapeutics

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.26 times more return on investment than Design Therapeutics. However, ATT Inc is 3.78 times less risky than Design Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Design Therapeutics is currently generating about -0.02 per unit of risk. If you would invest  2,724  in ATT Inc on May 4, 2025 and sell it today you would earn a total of  51.00  from holding ATT Inc or generate 1.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ATT Inc  vs.  Design Therapeutics

 Performance 
       Timeline  
ATT Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
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 newest stock price uproar, may contribute to short-horizon losses for the private investors.
Design Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Design Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

ATT and Design Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ATT and Design Therapeutics

The main advantage of trading using opposite ATT and Design Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Design Therapeutics 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 Design Therapeutics will offset losses from the drop in Design Therapeutics' long position.
The idea behind ATT Inc and Design Therapeutics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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