Correlation Between Cable One and Madison Square
Can any of the company-specific risk be diversified away by investing in both Cable One and Madison Square 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 Madison Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Madison Square Garden, you can compare the effects of market volatilities on Cable One and Madison Square 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 Madison Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Madison Square.
Diversification Opportunities for Cable One and Madison Square
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cable and Madison is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden 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 Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Cable One i.e., Cable One and Madison Square go up and down completely randomly.
Pair Corralation between Cable One and Madison Square
Given the investment horizon of 90 days Cable One is expected to under-perform the Madison Square. In addition to that, Cable One is 2.71 times more volatile than Madison Square Garden. It trades about -0.33 of its total potential returns per unit of risk. Madison Square Garden is currently generating about 0.13 per unit of volatility. If you would invest 3,486 in Madison Square Garden on November 8, 2024 and sell it today you would earn a total of 101.00 from holding Madison Square Garden or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Madison Square Garden
Performance |
| Timeline |
| Cable One |
| Madison Square Garden |
Cable One and Madison Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Madison Square
The main advantage of trading using opposite Cable One and Madison Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Madison Square 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 Madison Square will offset losses from the drop in Madison Square'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 |
| Madison Square vs. Madison Square Garden | Madison Square vs. Graham Holdings Co | Madison Square vs. Atlanta Braves Holdings, | Madison Square vs. Live Nation Entertainment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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