Correlation Between Cablevision Holding and Ternium SA
Can any of the company-specific risk be diversified away by investing in both Cablevision Holding and Ternium SA 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 Ternium SA 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 Ternium SA DRC, you can compare the effects of market volatilities on Cablevision Holding and Ternium SA 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 Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cablevision Holding and Ternium SA.
Diversification Opportunities for Cablevision Holding and Ternium SA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cablevision and Ternium is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cablevision Holding SA and Ternium SA DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA DRC 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 Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA DRC has no effect on the direction of Cablevision Holding i.e., Cablevision Holding and Ternium SA go up and down completely randomly.
Pair Corralation between Cablevision Holding and Ternium SA
Assuming the 90 days trading horizon Cablevision Holding SA is expected to generate 1.25 times more return on investment than Ternium SA. However, Cablevision Holding is 1.25 times more volatile than Ternium SA DRC. It trades about 0.57 of its potential returns per unit of risk. Ternium SA DRC is currently generating about -0.24 per unit of risk. If you would invest 470,500 in Cablevision Holding SA on August 24, 2024 and sell it today you would earn a total of 151,500 from holding Cablevision Holding SA or generate 32.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cablevision Holding SA vs. Ternium SA DRC
Performance |
| Timeline |
| Cablevision Holding |
| Ternium SA DRC |
Cablevision Holding and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cablevision Holding and Ternium SA
The main advantage of trading using opposite Cablevision Holding and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cablevision Holding position performs unexpectedly, Ternium SA 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 Ternium SA will offset losses from the drop in Ternium SA's long position.| Cablevision Holding vs. Compania de Transporte | Cablevision Holding vs. Transportadora de Gas | Cablevision Holding vs. Harmony Gold Mining | Cablevision Holding vs. Agrometal SAI |
| Ternium SA vs. Agrometal SAI | Ternium SA vs. Harmony Gold Mining | Ternium SA vs. Telecom Argentina | Ternium SA vs. Transportadora de Gas |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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