Correlation Between Cable One and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Cable One and Bread Financial 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 Cable One and Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Bread Financial Holdings, you can compare the effects of market volatilities on Cable One and Bread Financial 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 Cable One with a short position of Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Bread Financial.
Diversification Opportunities for Cable One and Bread Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cable and Bread is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings and Cable One 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 Cable One are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Cable One i.e., Cable One and Bread Financial go up and down completely randomly.
Pair Corralation between Cable One and Bread Financial
Assuming the 90 days trading horizon Cable One is expected to generate 0.42 times more return on investment than Bread Financial. However, Cable One is 2.36 times less risky than Bread Financial. It trades about 0.46 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.17 per unit of risk. If you would invest 970.00 in Cable One on August 24, 2024 and sell it today you would earn a total of 203.00 from holding Cable One or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Bread Financial Holdings
Performance |
| Timeline |
| Cable One |
| Bread Financial Holdings |
Cable One and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Bread Financial
The main advantage of trading using opposite Cable One and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Cable One vs. American Airlines Group | Cable One vs. Metalrgica Riosulense SA | Cable One vs. Charter Communications | Cable One vs. Zoom Video Communications |
| Bread Financial vs. Capital One Financial | Bread Financial vs. Fras le SA | Bread Financial vs. Clave Indices De | Bread Financial vs. BTG Pactual Logstica |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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