Correlation Between Cable One and IHS Holding
Can any of the company-specific risk be diversified away by investing in both Cable One and IHS Holding 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 IHS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and IHS Holding, you can compare the effects of market volatilities on Cable One and IHS Holding 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 IHS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and IHS Holding.
Diversification Opportunities for Cable One and IHS Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cable and IHS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and IHS Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHS Holding 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 IHS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHS Holding has no effect on the direction of Cable One i.e., Cable One and IHS Holding go up and down completely randomly.
Pair Corralation between Cable One and IHS Holding
Given the investment horizon of 90 days Cable One is expected to under-perform the IHS Holding. But the stock apears to be less risky and, when comparing its historical volatility, Cable One is 1.32 times less risky than IHS Holding. The stock trades about -0.06 of its potential returns per unit of risk. The IHS Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 339.00 in IHS Holding on November 8, 2024 and sell it today you would earn a total of 37.00 from holding IHS Holding or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. IHS Holding
Performance |
| Timeline |
| Cable One |
| IHS Holding |
Cable One and IHS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and IHS Holding
The main advantage of trading using opposite Cable One and IHS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, IHS Holding 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 IHS Holding will offset losses from the drop in IHS Holding's long position.| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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