Correlation Between Charter Communications and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Compagnie Plastic 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 Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Charter Communications and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Compagnie Plastic.
Diversification Opportunities for Charter Communications and Compagnie Plastic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Compagnie is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Charter Communications i.e., Charter Communications and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Charter Communications and Compagnie Plastic
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.15 times more return on investment than Compagnie Plastic. However, Charter Communications is 1.15 times more volatile than Compagnie Plastic Omnium. It trades about 0.16 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.09 per unit of risk. If you would invest 34,575 in Charter Communications on September 5, 2024 and sell it today you would earn a total of 3,290 from holding Charter Communications or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charter Communications vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Charter Communications |
| Compagnie Plastic Omnium |
Charter Communications and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Compagnie Plastic
The main advantage of trading using opposite Charter Communications and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc |
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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