Correlation Between Tri Pointe and ATT

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

By analyzing existing cross correlation between Tri Pointe Homes and ATT Inc, you can compare the effects of market volatilities on Tri Pointe 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 Tri Pointe with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Pointe and ATT.

Diversification Opportunities for Tri Pointe and ATT

0.61

Correlation Coefficient

Tri Pointe  ATT

Poor diversification

The 3 months correlation between Tri and ATT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tri Pointe Homes and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Tri Pointe 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 Tri Pointe Homes 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 Tri Pointe i.e., Tri Pointe and ATT go up and down completely randomly.

Pair Corralation between Tri Pointe and ATT

Assuming the 90 days horizon Tri Pointe Homes is expected to under-perform the ATT. In addition to that, Tri Pointe is 2.03 times more volatile than ATT Inc. It trades about -0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.02 per unit of volatility. If you would invest  2,276  in ATT Inc on July 18, 2025 and sell it today you would lose (40.00) from holding ATT Inc or give up 1.76% of portfolio value over 90 days.

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

Tri Pointe Homes  vs.  ATT Inc

Tri Pointe Homes

Risk-Adjusted Performance

Weakest

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

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. Despite nearly stable fundamental drivers, ATT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tri Pointe and ATT

The main advantage of trading using opposite Tri Pointe and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri Pointe 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 Tri Pointe Homes 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.