Correlation Between ATCO and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both ATCO and Rogers Communications 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 ATCO and Rogers Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATCO and Rogers Communications, you can compare the effects of market volatilities on ATCO and Rogers Communications 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 ATCO with a short position of Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATCO and Rogers Communications.
Diversification Opportunities for ATCO and Rogers Communications
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATCO and Rogers is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ATCO and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications and ATCO 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 ATCO are associated (or correlated) with Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of ATCO i.e., ATCO and Rogers Communications go up and down completely randomly.
Pair Corralation between ATCO and Rogers Communications
Assuming the 90 days trading horizon ATCO is expected to generate 1.35 times more return on investment than Rogers Communications. However, ATCO is 1.35 times more volatile than Rogers Communications. It trades about 0.1 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.01 per unit of risk. If you would invest 4,378 in ATCO on September 5, 2024 and sell it today you would earn a total of 627.00 from holding ATCO or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.82% |
| Values | Daily Returns |
ATCO vs. Rogers Communications
Performance |
| Timeline |
| ATCO |
| Rogers Communications |
ATCO and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATCO and Rogers Communications
The main advantage of trading using opposite ATCO and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATCO position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.The idea behind ATCO and Rogers Communications 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.| Rogers Communications vs. Computer Modelling Group | Rogers Communications vs. Perseus Mining | Rogers Communications vs. Algonquin Power Utilities | Rogers Communications vs. Verizon Communications CDR |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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