Correlation Between Lumen Technologies and Cable One
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Cable One 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 Lumen Technologies and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Cable One, you can compare the effects of market volatilities on Lumen Technologies and Cable One 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 Lumen Technologies with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Cable One.
Diversification Opportunities for Lumen Technologies and Cable One
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lumen and Cable is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Lumen Technologies 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 Lumen Technologies are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Cable One go up and down completely randomly.
Pair Corralation between Lumen Technologies and Cable One
Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the Cable One. In addition to that, Lumen Technologies is 1.52 times more volatile than Cable One. It trades about -0.24 of its total potential returns per unit of risk. Cable One is currently generating about -0.19 per unit of volatility. If you would invest 39,397 in Cable One on November 18, 2024 and sell it today you would lose (9,897) from holding Cable One or give up 25.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. Cable One
Performance |
| Timeline |
| Lumen Technologies |
| Cable One |
Lumen Technologies and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Cable One
The main advantage of trading using opposite Lumen Technologies and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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