Correlation Between CommScope Holding and Harmonic
Can any of the company-specific risk be diversified away by investing in both CommScope Holding and Harmonic 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 CommScope Holding and Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CommScope Holding Co and Harmonic, you can compare the effects of market volatilities on CommScope Holding and Harmonic 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 CommScope Holding with a short position of Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CommScope Holding and Harmonic.
Diversification Opportunities for CommScope Holding and Harmonic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CommScope and Harmonic is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CommScope Holding Co and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic and CommScope Holding 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 CommScope Holding Co are associated (or correlated) with Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of CommScope Holding i.e., CommScope Holding and Harmonic go up and down completely randomly.
Pair Corralation between CommScope Holding and Harmonic
Given the investment horizon of 90 days CommScope Holding Co is expected to generate 1.47 times more return on investment than Harmonic. However, CommScope Holding is 1.47 times more volatile than Harmonic. It trades about 0.08 of its potential returns per unit of risk. Harmonic is currently generating about -0.02 per unit of risk. If you would invest 393.00 in CommScope Holding Co on September 2, 2024 and sell it today you would earn a total of 84.00 from holding CommScope Holding Co or generate 21.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CommScope Holding Co vs. Harmonic
Performance |
| Timeline |
| CommScope Holding |
| Harmonic |
CommScope Holding and Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CommScope Holding and Harmonic
The main advantage of trading using opposite CommScope Holding and Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CommScope Holding position performs unexpectedly, Harmonic 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 Harmonic will offset losses from the drop in Harmonic's long position.| CommScope Holding vs. Harmonic | CommScope Holding vs. NETGEAR | CommScope Holding vs. Comtech Telecommunications Corp | CommScope Holding vs. ADTRAN Inc |
| Harmonic vs. NETGEAR | Harmonic vs. Juniper Networks | Harmonic vs. Digi International | Harmonic vs. Clearfield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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