Correlation Between Comcast Corp and GMO Internet
Can any of the company-specific risk be diversified away by investing in both Comcast Corp and GMO Internet 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 Corp and GMO Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast Corp and GMO Internet, you can compare the effects of market volatilities on Comcast Corp and GMO Internet 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 Corp with a short position of GMO Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and GMO Internet.
Diversification Opportunities for Comcast Corp and GMO Internet
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comcast and GMO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and GMO Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMO Internet and Comcast Corp 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 Corp are associated (or correlated) with GMO Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMO Internet has no effect on the direction of Comcast Corp i.e., Comcast Corp and GMO Internet go up and down completely randomly.
Pair Corralation between Comcast Corp and GMO Internet
Assuming the 90 days horizon Comcast Corp is expected to generate 0.67 times more return on investment than GMO Internet. However, Comcast Corp is 1.49 times less risky than GMO Internet. It trades about 0.05 of its potential returns per unit of risk. GMO Internet is currently generating about -0.07 per unit of risk. If you would invest 4,253 in Comcast Corp on September 3, 2024 and sell it today you would earn a total of 66.00 from holding Comcast Corp or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast Corp vs. GMO Internet
Performance |
| Timeline |
| Comcast Corp |
| GMO Internet |
Comcast Corp and GMO Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast Corp and GMO Internet
The main advantage of trading using opposite Comcast Corp and GMO Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp position performs unexpectedly, GMO Internet 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 GMO Internet will offset losses from the drop in GMO Internet's long position.| Comcast Corp vs. Highway Holdings Limited | Comcast Corp vs. QCR Holdings | Comcast Corp vs. Partner Communications | Comcast Corp vs. Acumen Pharmaceuticals |
| GMO Internet vs. Cable One | GMO Internet vs. Charter Communications | GMO Internet vs. Frontier Communications Parent | GMO Internet 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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