Correlation Between Charter Communications and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Corning Incorporated 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 Corning Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Corning Incorporated, you can compare the effects of market volatilities on Charter Communications and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Corning Incorporated.
Diversification Opportunities for Charter Communications and Corning Incorporated
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and Corning is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Charter Communications i.e., Charter Communications and Corning Incorporated go up and down completely randomly.
Pair Corralation between Charter Communications and Corning Incorporated
Assuming the 90 days trading horizon Charter Communications is expected to generate 2.49 times more return on investment than Corning Incorporated. However, Charter Communications is 2.49 times more volatile than Corning Incorporated. It trades about 0.19 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.13 per unit of risk. If you would invest 31,620 in Charter Communications on September 1, 2024 and sell it today you would earn a total of 5,455 from holding Charter Communications or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Corning Incorporated
Performance |
| Timeline |
| Charter Communications |
| Corning Incorporated |
Charter Communications and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Corning Incorporated
The main advantage of trading using opposite Charter Communications and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| Charter Communications vs. HK Electric Investments | Charter Communications vs. EAT WELL INVESTMENT | Charter Communications vs. ETFS Coffee ETC | Charter Communications vs. VITEC SOFTWARE GROUP |
| Corning Incorporated vs. GLG LIFE TECH | Corning Incorporated vs. Axcelis Technologies | Corning Incorporated vs. THORNEY TECHS LTD | Corning Incorporated vs. RCM TECHNOLOGIES |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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