Correlation Between Cable One and ONEOK
Can any of the company-specific risk be diversified away by investing in both Cable One and ONEOK 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 ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and ONEOK Inc, you can compare the effects of market volatilities on Cable One and ONEOK 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 ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and ONEOK.
Diversification Opportunities for Cable One and ONEOK
Very weak diversification
The 3 months correlation between Cable and ONEOK is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc 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 ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Cable One i.e., Cable One and ONEOK go up and down completely randomly.
Pair Corralation between Cable One and ONEOK
Assuming the 90 days trading horizon Cable One is expected to under-perform the ONEOK. In addition to that, Cable One is 1.25 times more volatile than ONEOK Inc. It trades about -0.03 of its total potential returns per unit of risk. ONEOK Inc is currently generating about 0.17 per unit of volatility. If you would invest 15,828 in ONEOK Inc on August 29, 2024 and sell it today you would earn a total of 16,900 from holding ONEOK Inc or generate 106.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.81% |
| Values | Daily Returns |
Cable One vs. ONEOK Inc
Performance |
| Timeline |
| Cable One |
| ONEOK Inc |
Cable One and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and ONEOK
The main advantage of trading using opposite Cable One and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Cable One vs. Unity Software | Cable One vs. Verizon Communications | Cable One vs. Paycom Software | Cable One vs. Extra Space Storage |
| ONEOK vs. Bemobi Mobile Tech | ONEOK vs. HDFC Bank Limited | ONEOK vs. Metalurgica Gerdau SA | ONEOK vs. Mitsubishi UFJ Financial |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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