Correlation Between Cable One and Orange SA
Can any of the company-specific risk be diversified away by investing in both Cable One and Orange SA 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 Orange SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Orange SA ADR, you can compare the effects of market volatilities on Cable One and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Orange SA.
Diversification Opportunities for Cable One and Orange SA
Excellent diversification
The 3 months correlation between Cable and Orange is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of Cable One i.e., Cable One and Orange SA go up and down completely randomly.
Pair Corralation between Cable One and Orange SA
Given the investment horizon of 90 days Cable One is expected to under-perform the Orange SA. In addition to that, Cable One is 2.47 times more volatile than Orange SA ADR. It trades about -0.03 of its total potential returns per unit of risk. Orange SA ADR is currently generating about 0.03 per unit of volatility. If you would invest 898.00 in Orange SA ADR on August 27, 2024 and sell it today you would earn a total of 147.00 from holding Orange SA ADR or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Orange SA ADR
Performance |
| Timeline |
| Cable One |
| Orange SA ADR |
Cable One and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Orange SA
The main advantage of trading using opposite Cable One and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA'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 |
| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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