Correlation Between Charter Communications and Coupang
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Coupang 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 Coupang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Coupang, you can compare the effects of market volatilities on Charter Communications and Coupang 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 Coupang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Coupang.
Diversification Opportunities for Charter Communications and Coupang
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Coupang is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Coupang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang 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 Coupang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang has no effect on the direction of Charter Communications i.e., Charter Communications and Coupang go up and down completely randomly.
Pair Corralation between Charter Communications and Coupang
Assuming the 90 days trading horizon Charter Communications is expected to generate 3.07 times less return on investment than Coupang. But when comparing it to its historical volatility, Charter Communications is 1.08 times less risky than Coupang. It trades about 0.01 of its potential returns per unit of risk. Coupang is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,728 in Coupang on September 3, 2024 and sell it today you would earn a total of 662.00 from holding Coupang or generate 38.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Coupang
Performance |
| Timeline |
| Charter Communications |
| Coupang |
Charter Communications and Coupang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Coupang
The main advantage of trading using opposite Charter Communications and Coupang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Coupang 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 Coupang will offset losses from the drop in Coupang'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 |
| Coupang vs. Cleanaway Waste Management | Coupang vs. Autohome ADR | Coupang vs. ETFS Coffee ETC | Coupang vs. Beazer Homes USA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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