Correlation Between ATN International and Orange SA
Can any of the company-specific risk be diversified away by investing in both ATN International and Orange SA 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 Orange SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATN International and Orange SA ADR, you can compare the effects of market volatilities on ATN International and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Orange SA.
Diversification Opportunities for ATN International and Orange SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATN and Orange is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of ATN International i.e., ATN International and Orange SA go up and down completely randomly.
Pair Corralation between ATN International and Orange SA
Given the investment horizon of 90 days ATN International is expected to under-perform the Orange SA. In addition to that, ATN International is 6.51 times more volatile than Orange SA ADR. It trades about -0.23 of its total potential returns per unit of risk. Orange SA ADR is currently generating about -0.15 per unit of volatility. If you would invest 1,083 in Orange SA ADR on August 24, 2024 and sell it today you would lose (39.00) from holding Orange SA ADR or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATN International vs. Orange SA ADR
Performance |
| Timeline |
| ATN International |
| Orange SA ADR |
ATN International and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATN International and Orange SA
The main advantage of trading using opposite ATN International and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA's long position.| ATN International vs. Eshallgo Class A | ATN International vs. Amtech Systems | ATN International vs. Gold Fields Ltd | ATN International vs. Aegean Airlines SA |
| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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