Correlation Between Anterix and InterDigital

Can any of the company-specific risk be diversified away by investing in both Anterix and InterDigital 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 Anterix and InterDigital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anterix and InterDigital, you can compare the effects of market volatilities on Anterix and InterDigital 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 Anterix with a short position of InterDigital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anterix and InterDigital.

Diversification Opportunities for Anterix and InterDigital

-0.03

Correlation Coefficient

Anterix  InterDigital

Good diversification

The 3 months correlation between Anterix and InterDigital is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and InterDigital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterDigital and Anterix 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 Anterix are associated (or correlated) with InterDigital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterDigital has no effect on the direction of Anterix i.e., Anterix and InterDigital go up and down completely randomly.

Pair Corralation between Anterix and InterDigital

Given the investment horizon of 90 days Anterix is expected to under-perform the InterDigital. In addition to that, Anterix is 1.09 times more volatile than InterDigital. It trades about -0.05 of its total potential returns per unit of risk. InterDigital is currently generating about 0.13 per unit of volatility. If you would invest  14,694  in InterDigital on October 25, 2024 and sell it today you would earn a total of  2,545  from holding InterDigital or generate 17.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anterix  vs.  InterDigital

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

InterDigital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InterDigital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, InterDigital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anterix and InterDigital

The main advantage of trading using opposite Anterix and InterDigital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anterix position performs unexpectedly, InterDigital 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 InterDigital will offset losses from the drop in InterDigital's long position.

The idea behind Anterix and InterDigital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..