Correlation Between Comcast Corp and Telephone
Can any of the company-specific risk be diversified away by investing in both Comcast Corp and Telephone 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 Telephone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast Corp and Telephone and Data, you can compare the effects of market volatilities on Comcast Corp and Telephone 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 Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and Telephone.
Diversification Opportunities for Comcast Corp and Telephone
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comcast and Telephone is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of Comcast Corp i.e., Comcast Corp and Telephone go up and down completely randomly.
Pair Corralation between Comcast Corp and Telephone
Assuming the 90 days horizon Comcast Corp is expected to generate 1.59 times less return on investment than Telephone. But when comparing it to its historical volatility, Comcast Corp is 1.63 times less risky than Telephone. It trades about 0.05 of its potential returns per unit of risk. Telephone and Data is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,314 in Telephone and Data on August 28, 2024 and sell it today you would earn a total of 624.00 from holding Telephone and Data or generate 47.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast Corp vs. Telephone and Data
Performance |
| Timeline |
| Comcast Corp |
| Telephone and Data |
Comcast Corp and Telephone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast Corp and Telephone
The main advantage of trading using opposite Comcast Corp and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp position performs unexpectedly, Telephone 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 Telephone will offset losses from the drop in Telephone's long position.| Comcast Corp vs. Cable One | Comcast Corp vs. T Mobile | Comcast Corp vs. Altice USA | Comcast Corp vs. Verizon Communications |
| Telephone vs. Telephone and Data | Telephone vs. ATT Inc | Telephone vs. Liberty Broadband Corp | Telephone vs. SiriusPoint |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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