Correlation Between Charter Communications and Sony
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Sony 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 Charter Communications and Sony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Sony Group, you can compare the effects of market volatilities on Charter Communications and Sony 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 Charter Communications with a short position of Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Sony.
Diversification Opportunities for Charter Communications and Sony
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charter and Sony is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Charter Communications 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 Charter Communications are associated (or correlated) with Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Charter Communications i.e., Charter Communications and Sony go up and down completely randomly.
Pair Corralation between Charter Communications and Sony
Assuming the 90 days trading horizon Charter Communications is expected to under-perform the Sony. In addition to that, Charter Communications is 1.96 times more volatile than Sony Group. It trades about -0.13 of its total potential returns per unit of risk. Sony Group is currently generating about 0.01 per unit of volatility. If you would invest 12,840 in Sony Group on November 7, 2024 and sell it today you would earn a total of 13.00 from holding Sony Group or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Sony Group
Performance |
| Timeline |
| Charter Communications |
| Sony Group |
Charter Communications and Sony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Sony
The main advantage of trading using opposite Charter Communications and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.| Charter Communications vs. Live Nation Entertainment, | Charter Communications vs. Tyson Foods | Charter Communications vs. TechnipFMC plc | Charter Communications vs. Hormel Foods |
| Sony vs. Metalurgica Gerdau SA | Sony vs. Lloyds Banking Group | Sony vs. Apartment Investment and | Sony vs. Multilaser Industrial SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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