Correlation Between Rogers Communications and ATCO
Can any of the company-specific risk be diversified away by investing in both Rogers Communications and ATCO 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 Rogers Communications and ATCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Communications and ATCO, you can compare the effects of market volatilities on Rogers Communications and ATCO 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 Rogers Communications with a short position of ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and ATCO.
Diversification Opportunities for Rogers Communications and ATCO
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rogers and ATCO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO and Rogers Communications 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 Rogers Communications are associated (or correlated) with ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of Rogers Communications i.e., Rogers Communications and ATCO go up and down completely randomly.
Pair Corralation between Rogers Communications and ATCO
Assuming the 90 days trading horizon Rogers Communications is expected to under-perform the ATCO. But the stock apears to be less risky and, when comparing its historical volatility, Rogers Communications is 1.33 times less risky than ATCO. The stock trades about -0.02 of its potential returns per unit of risk. The ATCO is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,650 in ATCO on September 5, 2024 and sell it today you would earn a total of 355.00 from holding ATCO or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Communications vs. ATCO
Performance |
| Timeline |
| Rogers Communications |
| ATCO |
Rogers Communications and ATCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Communications and ATCO
The main advantage of trading using opposite Rogers Communications and ATCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications position performs unexpectedly, ATCO 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 ATCO will offset losses from the drop in ATCO's long position.| Rogers Communications vs. Computer Modelling Group | Rogers Communications vs. Perseus Mining | Rogers Communications vs. Algonquin Power Utilities | Rogers Communications vs. Verizon Communications CDR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |