Correlation Between Array Digital and Frontier Communications

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

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

Diversification Opportunities for Array Digital and Frontier Communications

0.81

Correlation Coefficient

Array Digital  Frontier Communications

Very poor diversification

The 3 months correlation between Array and Frontier is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Array Digital Infrastructure, and Frontier Communications Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Communications and Array Digital 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 Array Digital Infrastructure, 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 Array Digital i.e., Array Digital and Frontier Communications go up and down completely randomly.

Pair Corralation between Array Digital and Frontier Communications

Allowing for the 90-day total investment horizon Array Digital is expected to generate 1.28 times less return on investment than Frontier Communications. In addition to that, Array Digital is 1.09 times more volatile than Frontier Communications Parent. It trades about 0.06 of its total potential returns per unit of risk. Frontier Communications Parent is currently generating about 0.08 per unit of volatility. If you would invest  1,590  in Frontier Communications Parent on June 12, 2025 and sell it today you would earn a total of  2,142  from holding Frontier Communications Parent or generate 134.72% return on investment over 90 days.

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

Array Digital Infrastructure,  vs.  Frontier Communications Parent

Array Digital Infras

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Array Digital Infrastructure, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Array Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Array Digital and Frontier Communications

The main advantage of trading using opposite Array Digital and Frontier Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Array Digital 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 Array Digital Infrastructure, 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.