Correlation Between IDT and ATN International
Can any of the company-specific risk be diversified away by investing in both IDT and ATN International 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 IDT and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDT Corporation and ATN International, you can compare the effects of market volatilities on IDT and ATN International 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 IDT with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDT and ATN International.
Diversification Opportunities for IDT and ATN International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IDT and ATN is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding IDT Corp. and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and IDT 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 IDT Corporation are associated (or correlated) with ATN International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATN International has no effect on the direction of IDT i.e., IDT and ATN International go up and down completely randomly.
Pair Corralation between IDT and ATN International
Considering the 90-day investment horizon IDT Corporation is expected to generate 0.25 times more return on investment than ATN International. However, IDT Corporation is 3.99 times less risky than ATN International. It trades about 0.16 of its potential returns per unit of risk. ATN International is currently generating about -0.23 per unit of risk. If you would invest 4,645 in IDT Corporation on August 23, 2024 and sell it today you would earn a total of 300.00 from holding IDT Corporation or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDT Corp. vs. ATN International
Performance |
| Timeline |
| IDT Corporation |
| ATN International |
IDT and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDT and ATN International
The main advantage of trading using opposite IDT and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDT position performs unexpectedly, ATN International 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 ATN International will offset losses from the drop in ATN International's long position.The idea behind IDT Corporation and ATN International 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.| ATN International vs. KT Corporation | ATN International vs. SK Telecom Co | ATN International vs. Ooma Inc | ATN International vs. Liberty Broadband Srs |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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