Correlation Between Comcast and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both Comcast and Verizon Communications 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 Comcast and Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast and Verizon Communications, you can compare the effects of market volatilities on Comcast and Verizon Communications 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 Comcast with a short position of Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast and Verizon Communications.
Diversification Opportunities for Comcast and Verizon Communications
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comcast and Verizon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Comcast and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and Comcast 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 Comcast are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Comcast i.e., Comcast and Verizon Communications go up and down completely randomly.
Pair Corralation between Comcast and Verizon Communications
Assuming the 90 days trading horizon Comcast is expected to generate 2.21 times less return on investment than Verizon Communications. In addition to that, Comcast is 1.12 times more volatile than Verizon Communications. It trades about 0.02 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.06 per unit of volatility. If you would invest 3,555 in Verizon Communications on October 21, 2024 and sell it today you would earn a total of 369.00 from holding Verizon Communications or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast vs. Verizon Communications
Performance |
| Timeline |
| Comcast |
| Verizon Communications |
Comcast and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast and Verizon Communications
The main advantage of trading using opposite Comcast and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Comcast vs. Charter Communications | Comcast vs. Live Nation Entertainment, | Comcast vs. Warner Music Group | Comcast vs. Paramount Global |
| Verizon Communications vs. United States Steel | Verizon Communications vs. Global X Funds | Verizon Communications vs. Broadridge Financial Solutions, | Verizon Communications vs. Palantir Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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