Correlation Between Charter Communications and Keyera Corp
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Keyera Corp 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 Keyera Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Keyera Corp, you can compare the effects of market volatilities on Charter Communications and Keyera Corp 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 Keyera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Keyera Corp.
Diversification Opportunities for Charter Communications and Keyera Corp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Keyera is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Keyera Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyera Corp 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 Keyera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyera Corp has no effect on the direction of Charter Communications i.e., Charter Communications and Keyera Corp go up and down completely randomly.
Pair Corralation between Charter Communications and Keyera Corp
Assuming the 90 days trading horizon Charter Communications is expected to generate 2.32 times more return on investment than Keyera Corp. However, Charter Communications is 2.32 times more volatile than Keyera Corp. It trades about 0.24 of its potential returns per unit of risk. Keyera Corp is currently generating about 0.28 per unit of risk. If you would invest 30,440 in Charter Communications on August 27, 2024 and sell it today you would earn a total of 6,940 from holding Charter Communications or generate 22.8% 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. Keyera Corp
Performance |
| Timeline |
| Charter Communications |
| Keyera Corp |
Charter Communications and Keyera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Keyera Corp
The main advantage of trading using opposite Charter Communications and Keyera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Keyera Corp 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 Keyera Corp will offset losses from the drop in Keyera Corp's long position.| Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc |
| Keyera Corp vs. Charter Communications | Keyera Corp vs. HEMISPHERE EGY | Keyera Corp vs. KRISPY KREME DL 01 | Keyera Corp vs. FEMALE HEALTH |
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 Positions Ratings module to 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.
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