Correlation Between Charter Communications and SEB SA
Can any of the company-specific risk be diversified away by investing in both Charter Communications and SEB SA 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 Charter Communications and SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications Cl and SEB SA, you can compare the effects of market volatilities on Charter Communications and SEB SA 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 Charter Communications with a short position of SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and SEB SA.
Diversification Opportunities for Charter Communications and SEB SA
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Charter and SEB is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA and Charter 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 Charter Communications Cl are associated (or correlated) with SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Charter Communications i.e., Charter Communications and SEB SA go up and down completely randomly.
Pair Corralation between Charter Communications and SEB SA
Assuming the 90 days trading horizon Charter Communications Cl is expected to generate 1.26 times more return on investment than SEB SA. However, Charter Communications is 1.26 times more volatile than SEB SA. It trades about 0.08 of its potential returns per unit of risk. SEB SA is currently generating about 0.04 per unit of risk. If you would invest 33,791 in Charter Communications Cl on September 12, 2024 and sell it today you would earn a total of 4,119 from holding Charter Communications Cl or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications Cl vs. SEB SA
Performance |
| Timeline |
| Charter Communications |
| SEB SA |
Charter Communications and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and SEB SA
The main advantage of trading using opposite Charter Communications and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.| Charter Communications vs. Hong Kong Land | Charter Communications vs. Neometals | Charter Communications vs. Coor Service Management | Charter Communications vs. Fidelity Sustainable USD |
| SEB SA vs. JD Sports Fashion | SEB SA vs. Charter Communications Cl | SEB SA vs. TechnipFMC PLC | SEB SA vs. Albion Technology General |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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