Correlation Between Frontier Communications and Omnicom
Can any of the company-specific risk be diversified away by investing in both Frontier Communications and Omnicom 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 Omnicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Communications Parent and Omnicom Group, you can compare the effects of market volatilities on Frontier Communications and Omnicom 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 Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Communications and Omnicom.
Diversification Opportunities for Frontier Communications and Omnicom
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Frontier and Omnicom is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Communications Parent and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group 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 Parent are associated (or correlated) with Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Frontier Communications i.e., Frontier Communications and Omnicom go up and down completely randomly.
Pair Corralation between Frontier Communications and Omnicom
Given the investment horizon of 90 days Frontier Communications Parent is expected to generate 1.4 times more return on investment than Omnicom. However, Frontier Communications is 1.4 times more volatile than Omnicom Group. It trades about 0.06 of its potential returns per unit of risk. Omnicom Group is currently generating about 0.01 per unit of risk. If you would invest 2,141 in Frontier Communications Parent on August 15, 2025 and sell it today you would earn a total of 1,655 from holding Frontier Communications Parent or generate 77.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Communications Parent vs. Omnicom Group
Performance |
| Timeline |
| Frontier Communications |
| Omnicom Group |
Frontier Communications and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Communications and Omnicom
The main advantage of trading using opposite Frontier Communications and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Communications position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom's long position.| Frontier Communications vs. Liberty Broadband Srs | Frontier Communications vs. KT Corporation | Frontier Communications vs. TIM Participacoes SA | Frontier Communications vs. SK Telecom Co |
| Omnicom vs. Interpublic Group of | Omnicom vs. News Corp A | Omnicom vs. Snap Inc | Omnicom vs. TKO Group Holdings, |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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