Correlation Between Charter Communications and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Scientific Games 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 Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Scientific Games, you can compare the effects of market volatilities on Charter Communications and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Scientific Games.
Diversification Opportunities for Charter Communications and Scientific Games
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and Scientific is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Charter Communications i.e., Charter Communications and Scientific Games go up and down completely randomly.
Pair Corralation between Charter Communications and Scientific Games
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.42 times more return on investment than Scientific Games. However, Charter Communications is 1.42 times more volatile than Scientific Games. It trades about -0.07 of its potential returns per unit of risk. Scientific Games is currently generating about -0.32 per unit of risk. If you would invest 34,645 in Charter Communications on October 11, 2024 and sell it today you would lose (985.00) from holding Charter Communications or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Scientific Games
Performance |
| Timeline |
| Charter Communications |
| Scientific Games |
Charter Communications and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Scientific Games
The main advantage of trading using opposite Charter Communications and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Charter Communications vs. UPDATE SOFTWARE | Charter Communications vs. AXWAY SOFTWARE EO | Charter Communications vs. CPU SOFTWAREHOUSE | Charter Communications vs. VITEC SOFTWARE GROUP |
| Scientific Games vs. Highlight Communications AG | Scientific Games vs. Charter Communications | Scientific Games vs. SK TELECOM TDADR | Scientific Games vs. TOMBADOR IRON LTD |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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