Correlation Between Altice USA and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Altice USA 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 Altice USA and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altice USA and Charter Communications, you can compare the effects of market volatilities on Altice USA 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 Altice USA with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altice USA and Charter Communications.
Diversification Opportunities for Altice USA and Charter Communications
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altice and Charter is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Altice USA 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 Altice USA 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 Altice USA i.e., Altice USA and Charter Communications go up and down completely randomly.
Pair Corralation between Altice USA and Charter Communications
Given the investment horizon of 90 days Altice USA is expected to generate 1.08 times less return on investment than Charter Communications. In addition to that, Altice USA is 1.14 times more volatile than Charter Communications. It trades about 0.18 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.22 per unit of volatility. If you would invest 32,982 in Charter Communications on August 23, 2024 and sell it today you would earn a total of 5,402 from holding Charter Communications or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altice USA vs. Charter Communications
Performance |
| Timeline |
| Altice USA |
| Charter Communications |
Altice USA and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altice USA and Charter Communications
The main advantage of trading using opposite Altice USA and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altice USA 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.| Altice USA vs. Liberty Broadband Srs | Altice USA vs. Cogent Communications Group | Altice USA vs. Charter Communications | Altice USA vs. Liberty Broadband Srs |
| Charter Communications vs. T Mobile | Charter Communications vs. Verizon Communications | Charter Communications vs. ATT Inc | Charter Communications vs. Liberty Broadband Srs |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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