Correlation Between Cable One and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both Cable One and Teladoc Health 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 Teladoc Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Teladoc Health, you can compare the effects of market volatilities on Cable One and Teladoc Health 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 Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Teladoc Health.
Diversification Opportunities for Cable One and Teladoc Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cable and Teladoc is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Cable One i.e., Cable One and Teladoc Health go up and down completely randomly.
Pair Corralation between Cable One and Teladoc Health
Assuming the 90 days trading horizon Cable One is expected to generate 1.11 times less return on investment than Teladoc Health. But when comparing it to its historical volatility, Cable One is 2.19 times less risky than Teladoc Health. It trades about 0.46 of its potential returns per unit of risk. Teladoc Health is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Teladoc Health on August 24, 2024 and sell it today you would earn a total of 36.00 from holding Teladoc Health or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Teladoc Health
Performance |
| Timeline |
| Cable One |
| Teladoc Health |
Cable One and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Teladoc Health
The main advantage of trading using opposite Cable One and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health'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 |
| Teladoc Health vs. Fras le SA | Teladoc Health vs. Western Digital | Teladoc Health vs. Clave Indices De | Teladoc Health 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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