Correlation Between ATN International and IHS Holding
Can any of the company-specific risk be diversified away by investing in both ATN International and IHS Holding 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 IHS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATN International and IHS Holding, you can compare the effects of market volatilities on ATN International and IHS Holding 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 IHS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and IHS Holding.
Diversification Opportunities for ATN International and IHS Holding
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATN and IHS is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and IHS Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHS Holding 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 IHS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHS Holding has no effect on the direction of ATN International i.e., ATN International and IHS Holding go up and down completely randomly.
Pair Corralation between ATN International and IHS Holding
Given the investment horizon of 90 days ATN International is expected to under-perform the IHS Holding. In addition to that, ATN International is 2.88 times more volatile than IHS Holding. It trades about -0.23 of its total potential returns per unit of risk. IHS Holding is currently generating about -0.14 per unit of volatility. If you would invest 305.00 in IHS Holding on August 23, 2024 and sell it today you would lose (26.00) from holding IHS Holding or give up 8.52% 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. IHS Holding
Performance |
| Timeline |
| ATN International |
| IHS Holding |
ATN International and IHS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATN International and IHS Holding
The main advantage of trading using opposite ATN International and IHS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International position performs unexpectedly, IHS Holding 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 IHS Holding will offset losses from the drop in IHS Holding's long position.| ATN International vs. KT Corporation | ATN International vs. SK Telecom Co | ATN International vs. Ooma Inc | ATN International vs. Liberty Broadband Srs |
| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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