Correlation Between Orange SA and ATN International
Can any of the company-specific risk be diversified away by investing in both Orange SA 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 Orange SA and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA ADR and ATN International, you can compare the effects of market volatilities on Orange SA 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 Orange SA with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and ATN International.
Diversification Opportunities for Orange SA and ATN International
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orange and ATN is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and Orange SA 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 Orange SA ADR 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 Orange SA i.e., Orange SA and ATN International go up and down completely randomly.
Pair Corralation between Orange SA and ATN International
Given the investment horizon of 90 days Orange SA ADR is expected to generate 0.28 times more return on investment than ATN International. However, Orange SA ADR is 3.51 times less risky 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 884.00 in Orange SA ADR on August 28, 2024 and sell it today you would earn a total of 161.00 from holding Orange SA ADR or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange SA ADR vs. ATN International
Performance |
| Timeline |
| Orange SA ADR |
| ATN International |
Orange SA and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and ATN International
The main advantage of trading using opposite Orange SA and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA 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.| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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