Correlation Between AltShares Trust and Communication Services

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

By analyzing existing cross correlation between AltShares Trust and Communication Services Select, you can compare the effects of market volatilities on AltShares Trust and Communication Services 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 AltShares Trust with a short position of Communication Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltShares Trust and Communication Services.

Diversification Opportunities for AltShares Trust and Communication Services

0.86

Correlation Coefficient

AltShares Trust  Communication Services

Very poor diversification

The 3 months correlation between AltShares and Communication is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Trust and Communication Services Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Services and AltShares Trust 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 AltShares Trust are associated (or correlated) with Communication Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Services has no effect on the direction of AltShares Trust i.e., AltShares Trust and Communication Services go up and down completely randomly.

Pair Corralation between AltShares Trust and Communication Services

Considering the 90-day investment horizon AltShares Trust is expected to generate 5.87 times less return on investment than Communication Services. But when comparing it to its historical volatility, AltShares Trust is 7.09 times less risky than Communication Services. It trades about 0.23 of its potential returns per unit of risk. Communication Services Select is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  10,669  in Communication Services Select on July 9, 2025 and sell it today you would earn a total of  982.00  from holding Communication Services Select or generate 9.2% return on investment over 90 days.

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

AltShares Trust   vs.  Communication Services Select

AltShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AltShares Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AltShares Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Communication Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Communication Services Select are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Communication Services may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with AltShares Trust and Communication Services

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

The idea behind AltShares Trust and Communication Services Select 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.