Correlation Between Advanced Info and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Consolidated Communications 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 Advanced Info and Consolidated Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Info Service and Consolidated Communications Holdings, you can compare the effects of market volatilities on Advanced Info and Consolidated Communications 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 Advanced Info with a short position of Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Consolidated Communications.
Diversification Opportunities for Advanced Info and Consolidated Communications
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Consolidated is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications and Advanced Info 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 Advanced Info Service are associated (or correlated) with Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of Advanced Info i.e., Advanced Info and Consolidated Communications go up and down completely randomly.
Pair Corralation between Advanced Info and Consolidated Communications
Assuming the 90 days trading horizon Advanced Info Service is expected to generate 0.54 times more return on investment than Consolidated Communications. However, Advanced Info Service is 1.86 times less risky than Consolidated Communications. It trades about 0.07 of its potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.02 per unit of risk. If you would invest 498.00 in Advanced Info Service on September 4, 2024 and sell it today you would earn a total of 277.00 from holding Advanced Info Service or generate 55.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Advanced Info Service vs. Consolidated Communications Ho
Performance |
| Timeline |
| Advanced Info Service |
| Consolidated Communications |
Advanced Info and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Consolidated Communications
The main advantage of trading using opposite Advanced Info and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.| Advanced Info vs. T Mobile | Advanced Info vs. China Mobile Limited | Advanced Info vs. ATT Inc | Advanced Info vs. Nippon Telegraph and |
| Consolidated Communications vs. T Mobile | Consolidated Communications vs. China Mobile Limited | Consolidated Communications vs. ATT Inc | Consolidated Communications vs. Nippon Telegraph and |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |