Correlation Between Altice USA and Sirius XM
Can any of the company-specific risk be diversified away by investing in both Altice USA and Sirius XM 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 Sirius XM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altice USA and Sirius XM Holding, you can compare the effects of market volatilities on Altice USA and Sirius XM 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 Sirius XM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altice USA and Sirius XM.
Diversification Opportunities for Altice USA and Sirius XM
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altice and Sirius is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA and Sirius XM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirius XM Holding 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 Sirius XM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirius XM Holding has no effect on the direction of Altice USA i.e., Altice USA and Sirius XM go up and down completely randomly.
Pair Corralation between Altice USA and Sirius XM
Given the investment horizon of 90 days Altice USA is expected to generate 1.31 times more return on investment than Sirius XM. However, Altice USA is 1.31 times more volatile than Sirius XM Holding. It trades about 0.16 of its potential returns per unit of risk. Sirius XM Holding is currently generating about -0.06 per unit of risk. If you would invest 180.00 in Altice USA on August 31, 2024 and sell it today you would earn a total of 80.00 from holding Altice USA or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altice USA vs. Sirius XM Holding
Performance |
| Timeline |
| Altice USA |
| Sirius XM Holding |
Altice USA and Sirius XM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altice USA and Sirius XM
The main advantage of trading using opposite Altice USA and Sirius XM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altice USA position performs unexpectedly, Sirius XM 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 Sirius XM will offset losses from the drop in Sirius XM's 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 |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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