Correlation Between Lumen Technologies and Comcast Corp
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Comcast Corp 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 Comcast Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Comcast Corp, you can compare the effects of market volatilities on Lumen Technologies and Comcast Corp 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 Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Comcast Corp.
Diversification Opportunities for Lumen Technologies and Comcast Corp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lumen and Comcast is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Comcast Corp go up and down completely randomly.
Pair Corralation between Lumen Technologies and Comcast Corp
Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the Comcast Corp. In addition to that, Lumen Technologies is 1.65 times more volatile than Comcast Corp. It trades about -0.24 of its total potential returns per unit of risk. Comcast Corp is currently generating about -0.13 per unit of volatility. If you would invest 4,264 in Comcast Corp on November 18, 2024 and sell it today you would lose (725.00) from holding Comcast Corp or give up 17.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. Comcast Corp
Performance |
| Timeline |
| Lumen Technologies |
| Comcast Corp |
Lumen Technologies and Comcast Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Comcast Corp
The main advantage of trading using opposite Lumen Technologies and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Comcast Corp 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 Comcast Corp will offset losses from the drop in Comcast Corp's long position.| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
| Comcast Corp vs. Cable One | Comcast Corp vs. T Mobile | Comcast Corp vs. Altice USA | Comcast Corp vs. Verizon Communications |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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