Correlation Between Cable One and Unifique Telecomunicaes
Can any of the company-specific risk be diversified away by investing in both Cable One and Unifique Telecomunicaes 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 Unifique Telecomunicaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Unifique Telecomunicaes SA, you can compare the effects of market volatilities on Cable One and Unifique Telecomunicaes 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 Unifique Telecomunicaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Unifique Telecomunicaes.
Diversification Opportunities for Cable One and Unifique Telecomunicaes
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cable and Unifique is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Unifique Telecomunicaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifique Telecomunicaes 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 Unifique Telecomunicaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifique Telecomunicaes has no effect on the direction of Cable One i.e., Cable One and Unifique Telecomunicaes go up and down completely randomly.
Pair Corralation between Cable One and Unifique Telecomunicaes
Assuming the 90 days trading horizon Cable One is expected to generate 0.78 times more return on investment than Unifique Telecomunicaes. However, Cable One is 1.28 times less risky than Unifique Telecomunicaes. It trades about 0.56 of its potential returns per unit of risk. Unifique Telecomunicaes SA is currently generating about -0.06 per unit of risk. If you would invest 996.00 in Cable One on September 1, 2024 and sell it today you would earn a total of 248.00 from holding Cable One or generate 24.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Unifique Telecomunicaes SA
Performance |
| Timeline |
| Cable One |
| Unifique Telecomunicaes |
Cable One and Unifique Telecomunicaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Unifique Telecomunicaes
The main advantage of trading using opposite Cable One and Unifique Telecomunicaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Unifique Telecomunicaes 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 Unifique Telecomunicaes will offset losses from the drop in Unifique Telecomunicaes' long position.| Cable One vs. Taiwan Semiconductor Manufacturing | Cable One vs. Metalrgica Riosulense SA | Cable One vs. Mitsubishi UFJ Financial | Cable One vs. Tyson Foods |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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