Correlation Between Frontier Communications and Intelsat
Can any of the company-specific risk be diversified away by investing in both Frontier Communications and Intelsat 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 Frontier Communications and Intelsat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Communications and Intelsat SA, you can compare the effects of market volatilities on Frontier Communications and Intelsat 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 Frontier Communications with a short position of Intelsat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Communications and Intelsat.
Diversification Opportunities for Frontier Communications and Intelsat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Frontier and Intelsat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Communications and Intelsat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelsat SA and Frontier Communications 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 Frontier Communications are associated (or correlated) with Intelsat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelsat SA has no effect on the direction of Frontier Communications i.e., Frontier Communications and Intelsat go up and down completely randomly.
Pair Corralation between Frontier Communications and Intelsat
If you would invest (100.00) in Intelsat SA on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Intelsat SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Communications vs. Intelsat SA
Performance |
| Timeline |
| Frontier Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Intelsat SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Frontier Communications and Intelsat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Communications and Intelsat
The main advantage of trading using opposite Frontier Communications and Intelsat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Communications position performs unexpectedly, Intelsat 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 Intelsat will offset losses from the drop in Intelsat's long position.The idea behind Frontier Communications and Intelsat SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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