Correlation Between B Communications and United States

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both B Communications and United States 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 B Communications and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and United States Cellular, you can compare the effects of market volatilities on B Communications and United States 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 B Communications with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and United States.

Diversification Opportunities for B Communications and United States

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between BCOMF and United is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular and B 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 B Communications are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of B Communications i.e., B Communications and United States go up and down completely randomly.

Pair Corralation between B Communications and United States

If you would invest  2,240  in United States Cellular on August 24, 2024 and sell it today you would earn a total of  37.00  from holding United States Cellular or generate 1.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.35%
ValuesDaily Returns

B Communications  vs.  United States Cellular

 Performance 
       Timeline  
B Communications 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days B Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, B Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
United States Cellular 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in December 2024.

B Communications and United States Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with B Communications and United States

The main advantage of trading using opposite B Communications and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.
The idea behind B Communications and United States Cellular pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities