Correlation Between Lumen Technologies and ATN International
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies 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 Lumen Technologies and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and ATN International, you can compare the effects of market volatilities on Lumen Technologies 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 Lumen Technologies with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and ATN International.
Diversification Opportunities for Lumen Technologies and ATN International
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lumen and ATN is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and Lumen Technologies 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 Lumen Technologies 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 Lumen Technologies i.e., Lumen Technologies and ATN International go up and down completely randomly.
Pair Corralation between Lumen Technologies and ATN International
Given the investment horizon of 90 days Lumen Technologies is expected to generate 1.93 times more return on investment than ATN International. However, Lumen Technologies is 1.93 times more volatile than ATN International. It trades about 0.04 of its potential returns per unit of risk. ATN International is currently generating about -0.03 per unit of risk. If you would invest 540.00 in Lumen Technologies on August 27, 2024 and sell it today you would earn a total of 248.00 from holding Lumen Technologies or generate 45.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. ATN International
Performance |
| Timeline |
| Lumen Technologies |
| ATN International |
Lumen Technologies and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and ATN International
The main advantage of trading using opposite Lumen Technologies and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies 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.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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