Correlation Between U S Cellular and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both U S Cellular and Airtel Africa 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 U S Cellular and Airtel Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Cellular and Airtel Africa Plc, you can compare the effects of market volatilities on U S Cellular and Airtel Africa 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 U S Cellular with a short position of Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of U S Cellular and Airtel Africa.
Diversification Opportunities for U S Cellular and Airtel Africa
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USM and Airtel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular and Airtel Africa Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtel Africa Plc and U S Cellular 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 United States Cellular are associated (or correlated) with Airtel Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtel Africa Plc has no effect on the direction of U S Cellular i.e., U S Cellular and Airtel Africa go up and down completely randomly.
Pair Corralation between U S Cellular and Airtel Africa
Considering the 90-day investment horizon United States Cellular is expected to generate 0.69 times more return on investment than Airtel Africa. However, United States Cellular is 1.45 times less risky than Airtel Africa. It trades about 0.06 of its potential returns per unit of risk. Airtel Africa Plc is currently generating about -0.05 per unit of risk. If you would invest 6,170 in United States Cellular on September 1, 2024 and sell it today you would earn a total of 176.00 from holding United States Cellular or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Cellular vs. Airtel Africa Plc
Performance |
| Timeline |
| United States Cellular |
| Airtel Africa Plc |
U S Cellular and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U S Cellular and Airtel Africa
The main advantage of trading using opposite U S Cellular and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular position performs unexpectedly, Airtel Africa 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 Airtel Africa will offset losses from the drop in Airtel Africa's long position.| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |