Correlation Between ATN International and Frontier Communications
Can any of the company-specific risk be diversified away by investing in both ATN International and Frontier 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 ATN International and Frontier Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATN International and Frontier Communications Parent, you can compare the effects of market volatilities on ATN International and Frontier 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 ATN International with a short position of Frontier Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Frontier Communications.
Diversification Opportunities for ATN International and Frontier Communications
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ATN and Frontier is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and Frontier Communications Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Communications and ATN International 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 ATN International are associated (or correlated) with Frontier Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Communications has no effect on the direction of ATN International i.e., ATN International and Frontier Communications go up and down completely randomly.
Pair Corralation between ATN International and Frontier Communications
Given the investment horizon of 90 days ATN International is expected to under-perform the Frontier Communications. In addition to that, ATN International is 9.64 times more volatile than Frontier Communications Parent. It trades about -0.25 of its total potential returns per unit of risk. Frontier Communications Parent is currently generating about -0.16 per unit of volatility. If you would invest 3,583 in Frontier Communications Parent on August 27, 2024 and sell it today you would lose (95.00) from holding Frontier Communications Parent or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATN International vs. Frontier Communications Parent
Performance |
| Timeline |
| ATN International |
| Frontier Communications |
ATN International and Frontier Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATN International and Frontier Communications
The main advantage of trading using opposite ATN International and Frontier Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International position performs unexpectedly, Frontier 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 Frontier Communications will offset losses from the drop in Frontier Communications' long position.| ATN International vs. KT Corporation | ATN International vs. SK Telecom Co | ATN International vs. Ooma Inc | ATN International vs. Liberty Broadband Srs |
| Frontier Communications vs. Cable One | Frontier Communications vs. Charter Communications | Frontier Communications vs. Liberty Broadband Srs | Frontier Communications vs. ATN International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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