Correlation Between ATN International and Liberty Latin
Can any of the company-specific risk be diversified away by investing in both ATN International and Liberty Latin 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 ATN International and Liberty Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATN International and Liberty Latin America, you can compare the effects of market volatilities on ATN International and Liberty Latin 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 ATN International with a short position of Liberty Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Liberty Latin.
Diversification Opportunities for ATN International and Liberty Latin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ATN and Liberty is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and Liberty Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Latin America and ATN International 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 ATN International are associated (or correlated) with Liberty Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Latin America has no effect on the direction of ATN International i.e., ATN International and Liberty Latin go up and down completely randomly.
Pair Corralation between ATN International and Liberty Latin
Given the investment horizon of 90 days ATN International is expected to generate 1.36 times more return on investment than Liberty Latin. However, ATN International is 1.36 times more volatile than Liberty Latin America. It trades about -0.04 of its potential returns per unit of risk. Liberty Latin America is currently generating about -0.11 per unit of risk. If you would invest 2,263 in ATN International on September 26, 2024 and sell it today you would lose (609.00) from holding ATN International or give up 26.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ATN International vs. Liberty Latin America
Performance |
Timeline |
ATN International |
Liberty Latin America |
ATN International and Liberty Latin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATN International and Liberty Latin
The main advantage of trading using opposite ATN International and Liberty Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International position performs unexpectedly, Liberty Latin 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 Liberty Latin will offset losses from the drop in Liberty Latin's long position.ATN International vs. Grab Holdings | ATN International vs. Cadence Design Systems | ATN International vs. Aquagold International | ATN International vs. Morningstar Unconstrained Allocation |
Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Broadband Srs | Liberty Latin vs. Shenandoah Telecommunications Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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