Correlation Between Cable One and TIM Participacoes
Can any of the company-specific risk be diversified away by investing in both Cable One and TIM Participacoes 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 TIM Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and TIM Participacoes SA, you can compare the effects of market volatilities on Cable One and TIM Participacoes 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 TIM Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and TIM Participacoes.
Diversification Opportunities for Cable One and TIM Participacoes
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cable and TIM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and TIM Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM Participacoes 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 TIM Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM Participacoes has no effect on the direction of Cable One i.e., Cable One and TIM Participacoes go up and down completely randomly.
Pair Corralation between Cable One and TIM Participacoes
Given the investment horizon of 90 days Cable One is expected to under-perform the TIM Participacoes. In addition to that, Cable One is 1.49 times more volatile than TIM Participacoes SA. It trades about -0.03 of its total potential returns per unit of risk. TIM Participacoes SA is currently generating about 0.03 per unit of volatility. If you would invest 1,115 in TIM Participacoes SA on August 23, 2024 and sell it today you would earn a total of 254.00 from holding TIM Participacoes SA or generate 22.78% 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. TIM Participacoes SA
Performance |
| Timeline |
| Cable One |
| TIM Participacoes |
Cable One and TIM Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and TIM Participacoes
The main advantage of trading using opposite Cable One and TIM Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, TIM Participacoes 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 TIM Participacoes will offset losses from the drop in TIM Participacoes' long position.| Cable One vs. Small Cap Core | Cable One vs. FitLife Brands, Common | Cable One vs. Mutual Of America | Cable One vs. Gfl Environmental Holdings |
| TIM Participacoes vs. SK Telecom Co | TIM Participacoes vs. PLDT Inc ADR | TIM Participacoes vs. Liberty Broadband Srs | TIM Participacoes vs. Liberty Broadband Srs |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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