Correlation Between Charter Communications and Altice USA
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Altice USA 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 Altice USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Altice USA, you can compare the effects of market volatilities on Charter Communications and Altice USA 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 Altice USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Altice USA.
Diversification Opportunities for Charter Communications and Altice USA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charter and Altice is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Altice USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice USA 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 Altice USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice USA has no effect on the direction of Charter Communications i.e., Charter Communications and Altice USA go up and down completely randomly.
Pair Corralation between Charter Communications and Altice USA
Given the investment horizon of 90 days Charter Communications is expected to under-perform the Altice USA. But the stock apears to be less risky and, when comparing its historical volatility, Charter Communications is 1.69 times less risky than Altice USA. The stock trades about -0.04 of its potential returns per unit of risk. The Altice USA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Altice USA on November 18, 2024 and sell it today you would earn a total of 45.00 from holding Altice USA or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Altice USA
Performance |
| Timeline |
| Charter Communications |
| Altice USA |
Charter Communications and Altice USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Altice USA
The main advantage of trading using opposite Charter Communications and Altice USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Altice USA 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 Altice USA will offset losses from the drop in Altice USA's long position.| Charter Communications vs. T Mobile | Charter Communications vs. Verizon Communications | Charter Communications vs. ATT Inc | Charter Communications vs. Liberty Broadband Srs |
| Altice USA vs. Liberty Broadband Srs | Altice USA vs. Cogent Communications Group | Altice USA vs. Charter Communications | Altice USA 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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