Correlation Between Telecom Argentina and ATN International
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina 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 Telecom Argentina and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina SA and ATN International, you can compare the effects of market volatilities on Telecom Argentina 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 Telecom Argentina with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and ATN International.
Diversification Opportunities for Telecom Argentina and ATN International
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telecom and ATN is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and Telecom Argentina 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 Telecom Argentina SA 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 Telecom Argentina i.e., Telecom Argentina and ATN International go up and down completely randomly.
Pair Corralation between Telecom Argentina and ATN International
Considering the 90-day investment horizon Telecom Argentina SA is expected to generate 0.59 times more return on investment than ATN International. However, Telecom Argentina SA is 1.69 times less risky than ATN International. It trades about 0.46 of its potential returns per unit of risk. ATN International is currently generating about -0.24 per unit of risk. If you would invest 877.00 in Telecom Argentina SA on August 27, 2024 and sell it today you would earn a total of 443.00 from holding Telecom Argentina SA or generate 50.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina SA vs. ATN International
Performance |
| Timeline |
| Telecom Argentina |
| ATN International |
Telecom Argentina and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and ATN International
The main advantage of trading using opposite Telecom Argentina and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina 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.| Telecom Argentina vs. Telefonica SA ADR | Telecom Argentina vs. Orange SA ADR | Telecom Argentina vs. SK Telecom Co | Telecom Argentina 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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