Correlation Between Harmonic and CommScope Holding
Can any of the company-specific risk be diversified away by investing in both Harmonic and CommScope Holding 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 Harmonic and CommScope Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmonic and CommScope Holding Co, you can compare the effects of market volatilities on Harmonic and CommScope Holding 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 Harmonic with a short position of CommScope Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmonic and CommScope Holding.
Diversification Opportunities for Harmonic and CommScope Holding
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmonic and CommScope is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Harmonic and CommScope Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CommScope Holding and Harmonic 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 Harmonic are associated (or correlated) with CommScope Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CommScope Holding has no effect on the direction of Harmonic i.e., Harmonic and CommScope Holding go up and down completely randomly.
Pair Corralation between Harmonic and CommScope Holding
Given the investment horizon of 90 days Harmonic is expected to generate 0.83 times more return on investment than CommScope Holding. However, Harmonic is 1.2 times less risky than CommScope Holding. It trades about -0.09 of its potential returns per unit of risk. CommScope Holding Co is currently generating about -0.15 per unit of risk. If you would invest 1,470 in Harmonic on August 25, 2024 and sell it today you would lose (216.50) from holding Harmonic or give up 14.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmonic vs. CommScope Holding Co
Performance |
| Timeline |
| Harmonic |
| CommScope Holding |
Harmonic and CommScope Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmonic and CommScope Holding
The main advantage of trading using opposite Harmonic and CommScope Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmonic position performs unexpectedly, CommScope Holding 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 CommScope Holding will offset losses from the drop in CommScope Holding's long position.| Harmonic vs. NETGEAR | Harmonic vs. Juniper Networks | Harmonic vs. Digi International | Harmonic vs. Clearfield |
| CommScope Holding vs. Harmonic | CommScope Holding vs. NETGEAR | CommScope Holding vs. Comtech Telecommunications Corp | CommScope Holding vs. ADTRAN Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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