Correlation Between Fras Le and American Tower
Can any of the company-specific risk be diversified away by investing in both Fras Le and American Tower 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 Fras Le and American Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and American Tower, you can compare the effects of market volatilities on Fras Le and American Tower 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 Fras Le with a short position of American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and American Tower.
Diversification Opportunities for Fras Le and American Tower
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fras and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and American Tower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower and Fras Le 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 Fras le SA are associated (or correlated) with American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower has no effect on the direction of Fras Le i.e., Fras Le and American Tower go up and down completely randomly.
Pair Corralation between Fras Le and American Tower
Assuming the 90 days trading horizon Fras le SA is expected to generate 0.83 times more return on investment than American Tower. However, Fras le SA is 1.21 times less risky than American Tower. It trades about 0.1 of its potential returns per unit of risk. American Tower is currently generating about 0.02 per unit of risk. If you would invest 1,013 in Fras le SA on August 27, 2024 and sell it today you would earn a total of 1,052 from holding Fras le SA or generate 103.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. American Tower
Performance |
| Timeline |
| Fras le SA |
| American Tower |
Fras Le and American Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and American Tower
The main advantage of trading using opposite Fras Le and American Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, American Tower 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 American Tower will offset losses from the drop in American Tower's long position.| Fras Le vs. Baidu Inc | Fras Le vs. Deutsche Bank Aktiengesellschaft | Fras Le vs. HSBC Holdings plc | Fras Le vs. The Bank of |
| American Tower vs. Iron Mountain Incorporated | American Tower vs. Fras le SA | American Tower vs. Clave Indices De | American Tower vs. BTG Pactual Logstica |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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