Correlation Between Altice USA and Telephone

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

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

Diversification Opportunities for Altice USA and Telephone

0.06

Correlation Coefficient

Altice USA  Telephone

Significant diversification

The 3 months correlation between Altice and Telephone is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA 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 Altice USA 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 Altice USA 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 Altice USA i.e., Altice USA and Telephone go up and down completely randomly.

Pair Corralation between Altice USA and Telephone

Given the investment horizon of 90 days Altice USA is expected to generate 2.41 times more return on investment than Telephone. However, Altice USA is 2.41 times more volatile than Telephone and Data. It trades about 0.08 of its potential returns per unit of risk. Telephone and Data is currently generating about 0.05 per unit of risk. If you would invest  254.00  in Altice USA on October 25, 2024 and sell it today you would earn a total of  37.50  from holding Altice USA or generate 14.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Altice USA  vs.  Telephone and Data

Altice USA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altice USA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Altice USA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Telephone and Data

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Telephone and Data are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Telephone is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Altice USA and Telephone

The main advantage of trading using opposite Altice USA and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altice USA 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 Altice USA 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.