Correlation Between Charter Communications and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Lamar Advertising 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 Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Lamar Advertising, you can compare the effects of market volatilities on Charter Communications and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Lamar Advertising.
Diversification Opportunities for Charter Communications and Lamar Advertising
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and Lamar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Charter Communications i.e., Charter Communications and Lamar Advertising go up and down completely randomly.
Pair Corralation between Charter Communications and Lamar Advertising
Assuming the 90 days trading horizon Charter Communications is expected to under-perform the Lamar Advertising. In addition to that, Charter Communications is 1.4 times more volatile than Lamar Advertising. It trades about -0.1 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.12 per unit of volatility. If you would invest 11,700 in Lamar Advertising on November 7, 2024 and sell it today you would earn a total of 300.00 from holding Lamar Advertising or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charter Communications vs. Lamar Advertising
Performance |
| Timeline |
| Charter Communications |
| Lamar Advertising |
Charter Communications and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Lamar Advertising
The main advantage of trading using opposite Charter Communications and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| Charter Communications vs. T MOBILE INCDL 00001 | Charter Communications vs. Grupo Carso SAB | Charter Communications vs. GRUPO CARSO A1 | Charter Communications vs. Highlight Communications AG |
| Lamar Advertising vs. Commercial Vehicle Group | Lamar Advertising vs. VIRGIN WINES UK | Lamar Advertising vs. INTER CARS SA | Lamar Advertising vs. COMMERCIAL VEHICLE |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |