Correlation Between Verizon Communications and ATN International
Can any of the company-specific risk be diversified away by investing in both Verizon Communications 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 Verizon Communications and ATN International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and ATN International, you can compare the effects of market volatilities on Verizon Communications 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 Verizon Communications with a short position of ATN International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and ATN International.
Diversification Opportunities for Verizon Communications and ATN International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Verizon and ATN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International and Verizon 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 Verizon Communications 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 Verizon Communications i.e., Verizon Communications and ATN International go up and down completely randomly.
Pair Corralation between Verizon Communications and ATN International
Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 0.38 times more return on investment than ATN International. However, Verizon Communications is 2.61 times less risky than ATN International. It trades about 0.05 of its potential returns per unit of risk. ATN International is currently generating about -0.03 per unit of risk. If you would invest 3,238 in Verizon Communications on August 24, 2024 and sell it today you would earn a total of 1,012 from holding Verizon Communications or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verizon Communications vs. ATN International
Performance |
| Timeline |
| Verizon Communications |
| ATN International |
Verizon Communications and ATN International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verizon Communications and ATN International
The main advantage of trading using opposite Verizon Communications and ATN International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications 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.| Verizon Communications vs. T Mobile | Verizon Communications vs. Lumen Technologies | Verizon Communications vs. Comcast Corp | Verizon Communications vs. ATT Inc |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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