Correlation Between Cablevision Holding and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Cablevision Holding and Telecom Argentina 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 Cablevision Holding and Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cablevision Holding SA and Telecom Argentina, you can compare the effects of market volatilities on Cablevision Holding and Telecom Argentina 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 Cablevision Holding with a short position of Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cablevision Holding and Telecom Argentina.
Diversification Opportunities for Cablevision Holding and Telecom Argentina
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cablevision and Telecom is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cablevision Holding SA and Telecom Argentina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and Cablevision Holding 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 Cablevision Holding SA are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Cablevision Holding i.e., Cablevision Holding and Telecom Argentina go up and down completely randomly.
Pair Corralation between Cablevision Holding and Telecom Argentina
Assuming the 90 days trading horizon Cablevision Holding SA is expected to generate 0.85 times more return on investment than Telecom Argentina. However, Cablevision Holding SA is 1.17 times less risky than Telecom Argentina. It trades about 0.09 of its potential returns per unit of risk. Telecom Argentina is currently generating about -0.05 per unit of risk. If you would invest 734,000 in Cablevision Holding SA on November 2, 2024 and sell it today you would earn a total of 34,000 from holding Cablevision Holding SA or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cablevision Holding SA vs. Telecom Argentina
Performance |
| Timeline |
| Cablevision Holding |
| Telecom Argentina |
Cablevision Holding and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cablevision Holding and Telecom Argentina
The main advantage of trading using opposite Cablevision Holding and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cablevision Holding position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| Cablevision Holding vs. Harmony Gold Mining | Cablevision Holding vs. Compania de Transporte | Cablevision Holding vs. United States Steel | Cablevision Holding vs. Transportadora de Gas |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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