Correlation Between Charter Communications and CenterPoint Energy
Can any of the company-specific risk be diversified away by investing in both Charter Communications and CenterPoint 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 CenterPoint 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 CenterPoint Energy, you can compare the effects of market volatilities on Charter Communications and CenterPoint 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 CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and CenterPoint Energy.
Diversification Opportunities for Charter Communications and CenterPoint Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charter and CenterPoint is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint 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 CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of Charter Communications i.e., Charter Communications and CenterPoint Energy go up and down completely randomly.
Pair Corralation between Charter Communications and CenterPoint Energy
If you would invest 34,575 in Charter Communications on September 4, 2024 and sell it today you would earn a total of 2,925 from holding Charter Communications or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Charter Communications vs. CenterPoint Energy
Performance |
| Timeline |
| Charter Communications |
| CenterPoint Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Charter Communications and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and CenterPoint Energy
The main advantage of trading using opposite Charter Communications and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, CenterPoint 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy's long position.| Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc |
| CenterPoint Energy vs. INTERSHOP Communications Aktiengesellschaft | CenterPoint Energy vs. Datadog | CenterPoint Energy vs. MAVEN WIRELESS SWEDEN | CenterPoint Energy vs. Charter Communications |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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