Correlation Between Cable One and Ooma
Can any of the company-specific risk be diversified away by investing in both Cable One and Ooma 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 Ooma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Ooma Inc, you can compare the effects of market volatilities on Cable One and Ooma 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 Ooma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Ooma.
Diversification Opportunities for Cable One and Ooma
Poor diversification
The 3 months correlation between Cable and Ooma is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Ooma Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ooma 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 Ooma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ooma Inc has no effect on the direction of Cable One i.e., Cable One and Ooma go up and down completely randomly.
Pair Corralation between Cable One and Ooma
Given the investment horizon of 90 days Cable One is expected to generate 1.7 times more return on investment than Ooma. However, Cable One is 1.7 times more volatile than Ooma Inc. It trades about 0.27 of its potential returns per unit of risk. Ooma Inc is currently generating about 0.34 per unit of risk. If you would invest 34,431 in Cable One on August 27, 2024 and sell it today you would earn a total of 7,224 from holding Cable One or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Ooma Inc
Performance |
| Timeline |
| Cable One |
| Ooma Inc |
Cable One and Ooma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Ooma
The main advantage of trading using opposite Cable One and Ooma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Ooma 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 Ooma will offset losses from the drop in Ooma's long position.| Cable One vs. Liberty Global PLC | Cable One vs. Liberty Global PLC | Cable One vs. Liberty Broadband Srs | Cable One vs. Shenandoah Telecommunications Co |
| Ooma vs. Shenandoah Telecommunications Co | Ooma vs. Anterix | Ooma vs. Liberty Broadband Corp | Ooma vs. IDT Corporation |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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