Correlation Between Nexters Warrant and Frontier Communications

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

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

Diversification Opportunities for Nexters Warrant and Frontier Communications

-0.15

Correlation Coefficient

Nexters Warrant  Frontier Communications

Good diversification

The 3 months correlation between Nexters and Frontier is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nexters Warrant and Frontier Communications Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Communications and Nexters Warrant 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 Nexters Warrant are associated (or correlated) with Frontier Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Communications has no effect on the direction of Nexters Warrant i.e., Nexters Warrant and Frontier Communications go up and down completely randomly.

Pair Corralation between Nexters Warrant and Frontier Communications

Assuming the 90 days horizon Nexters Warrant is expected to under-perform the Frontier Communications. In addition to that, Nexters Warrant is 80.51 times more volatile than Frontier Communications Parent. It trades about -0.1 of its total potential returns per unit of risk. Frontier Communications Parent is currently generating about 0.21 per unit of volatility. If you would invest  3,470  in Frontier Communications Parent on December 30, 2024 and sell it today you would earn a total of  119.00  from holding Frontier Communications Parent or generate 3.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.81%
Values	Daily Returns

Nexters Warrant  vs.  Frontier Communications Parent

Nexters Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexters Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Frontier Communications

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Frontier Communications Parent are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Frontier Communications is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nexters Warrant and Frontier Communications

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

The idea behind Nexters Warrant and Frontier Communications Parent 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.