Correlation Between ATN International and Telephone

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

By analyzing existing cross correlation between ATN International and Telephone and Data, you can compare the effects of market volatilities on ATN International and Telephone 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 Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Telephone.

Diversification Opportunities for ATN International and Telephone

-0.73

Correlation Coefficient

ATN International  Telephone

Pay attention - limited upside

The 3 months correlation between ATN and Telephone is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of ATN International i.e., ATN International and Telephone go up and down completely randomly.

Pair Corralation between ATN International and Telephone

Given the investment horizon of 90 days ATN International is expected to under-perform the Telephone. In addition to that, ATN International is 1.38 times more volatile than Telephone and Data. It trades about -0.07 of its total potential returns per unit of risk. Telephone and Data is currently generating about 0.19 per unit of volatility. If you would invest  2,358  in Telephone and Data on August 30, 2024 and sell it today you would earn a total of  1,054  from holding Telephone and Data or generate 44.7% return on investment over 90 days.

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

ATN International  vs.  Telephone and Data

ATN International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATN International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Telephone and Data

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telephone and Data are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental indicators, Telephone unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATN International and Telephone

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

The idea behind ATN International and Telephone and Data 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.