Correlation Between Charter Communications and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Charter Communications and 2G ENERGY 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 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and 2G ENERGY , you can compare the effects of market volatilities on Charter Communications and 2G ENERGY 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 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and 2G ENERGY.
Diversification Opportunities for Charter Communications and 2G ENERGY
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and 2GB is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Charter Communications i.e., Charter Communications and 2G ENERGY go up and down completely randomly.
Pair Corralation between Charter Communications and 2G ENERGY
Assuming the 90 days trading horizon Charter Communications is expected to generate 0.97 times more return on investment than 2G ENERGY. However, Charter Communications is 1.04 times less risky than 2G ENERGY. It trades about 0.13 of its potential returns per unit of risk. 2G ENERGY is currently generating about 0.01 per unit of risk. If you would invest 34,575 in Charter Communications on September 3, 2024 and sell it today you would earn a total of 2,500 from holding Charter Communications or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. 2G ENERGY
Performance |
| Timeline |
| Charter Communications |
| 2G ENERGY |
Charter Communications and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and 2G ENERGY
The main advantage of trading using opposite Charter Communications and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Charter Communications vs. Playa Hotels Resorts | Charter Communications vs. NH HOTEL GROUP | Charter Communications vs. RYU Apparel | Charter Communications vs. Pebblebrook Hotel Trust |
| 2G ENERGY vs. Hyatt Hotels | 2G ENERGY vs. MHP Hotel AG | 2G ENERGY vs. HYATT HOTELS A | 2G ENERGY vs. InterContinental Hotels Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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