Correlation Between Eagle Eye and Charter Communications

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Can any of the company-specific risk be diversified away by investing in both Eagle Eye and Charter Communications 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 Eagle Eye and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Eye Solutions and Charter Communications Cl, you can compare the effects of market volatilities on Eagle Eye and Charter Communications 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 Eagle Eye with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Eye and Charter Communications.

Diversification Opportunities for Eagle Eye and Charter Communications

EagleCharterDiversified AwayEagleCharterDiversified Away100%
0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Eagle and Charter is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Eye Solutions and Charter Communications Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Eagle Eye 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 Eagle Eye Solutions are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Eagle Eye i.e., Eagle Eye and Charter Communications go up and down completely randomly.

Pair Corralation between Eagle Eye and Charter Communications

Assuming the 90 days trading horizon Eagle Eye Solutions is expected to generate 0.37 times more return on investment than Charter Communications. However, Eagle Eye Solutions is 2.69 times less risky than Charter Communications. It trades about 0.26 of its potential returns per unit of risk. Charter Communications Cl is currently generating about 0.02 per unit of risk. If you would invest  36,400  in Eagle Eye Solutions on November 30, 2024 and sell it today you would earn a total of  2,100  from holding Eagle Eye Solutions or generate 5.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eagle Eye Solutions  vs.  Charter Communications Cl

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020
JavaScript chart by amCharts 3.21.15EYE 0HW4
       Timeline  
Eagle Eye Solutions 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Eagle Eye Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15JanFebFeb360380400420440460480
Charter Communications 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Charter Communications Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebFeb330340350360370380390400

Eagle Eye and Charter Communications Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.47-4.1-2.73-1.350.01.272.553.825.1 0.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15EYE 0HW4
       Returns  

Pair Trading with Eagle Eye and Charter Communications

The main advantage of trading using opposite Eagle Eye and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Eye position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.
The idea behind Eagle Eye Solutions and Charter Communications Cl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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