Correlation Between Airtel Africa and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Airtel Africa and Charter 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 Airtel Africa and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airtel Africa Plc and Charter Communications, you can compare the effects of market volatilities on Airtel Africa and Charter 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 Airtel Africa with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtel Africa and Charter Communications.
Diversification Opportunities for Airtel Africa and Charter Communications
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Airtel and Charter is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Airtel Africa Plc and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Airtel Africa 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 Airtel Africa Plc are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Airtel Africa i.e., Airtel Africa and Charter Communications go up and down completely randomly.
Pair Corralation between Airtel Africa and Charter Communications
Assuming the 90 days horizon Airtel Africa Plc is expected to under-perform the Charter Communications. But the pink sheet apears to be less risky and, when comparing its historical volatility, Airtel Africa Plc is 1.07 times less risky than Charter Communications. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Charter Communications is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 33,130 in Charter Communications on August 31, 2024 and sell it today you would earn a total of 5,851 from holding Charter Communications or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airtel Africa Plc vs. Charter Communications
Performance |
| Timeline |
| Airtel Africa Plc |
| Charter Communications |
Airtel Africa and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airtel Africa and Charter Communications
The main advantage of trading using opposite Airtel Africa and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airtel Africa position performs unexpectedly, Charter 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Airtel Africa vs. Verizon Communications | Airtel Africa vs. ATT Inc | Airtel Africa vs. Comcast Corp | Airtel Africa vs. KDDI Corp |
| Charter Communications vs. RLJ Lodging Trust | Charter Communications vs. Aquagold International | Charter Communications vs. Stepstone Group | Charter Communications vs. Morningstar Unconstrained Allocation |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |