Correlation Between Main International and ADTRAN
Can any of the company-specific risk be diversified away by investing in both Main International and ADTRAN 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 Main International and ADTRAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main International ETF and ADTRAN Inc, you can compare the effects of market volatilities on Main International and ADTRAN 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 Main International with a short position of ADTRAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and ADTRAN.
Diversification Opportunities for Main International and ADTRAN
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Main and ADTRAN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Main 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 Main International ETF are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Main International i.e., Main International and ADTRAN go up and down completely randomly.
Pair Corralation between Main International and ADTRAN
Given the investment horizon of 90 days Main International is expected to generate 44.74 times less return on investment than ADTRAN. But when comparing it to its historical volatility, Main International ETF is 3.96 times less risky than ADTRAN. It trades about 0.01 of its potential returns per unit of risk. ADTRAN Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 560.00 in ADTRAN Inc on August 31, 2024 and sell it today you would earn a total of 290.00 from holding ADTRAN Inc or generate 51.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main International ETF vs. ADTRAN Inc
Performance |
| Timeline |
| Main International ETF |
| ADTRAN Inc |
Main International and ADTRAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main International and ADTRAN
The main advantage of trading using opposite Main International and ADTRAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main International position performs unexpectedly, ADTRAN 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 ADTRAN will offset losses from the drop in ADTRAN's long position.| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
| ADTRAN vs. Mynaric AG ADR | ADTRAN vs. KVH Industries | ADTRAN vs. Telesat Corp | ADTRAN vs. Digi 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 CEOs Directory module to screen CEOs from public companies around the world.
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