Correlation Between Nasdaq and CHARTER
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By analyzing existing cross correlation between Nasdaq Inc and CHARTER MUNICATIONS OPERATING, you can compare the effects of market volatilities on Nasdaq and CHARTER 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 Nasdaq with a short position of CHARTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and CHARTER.
Diversification Opportunities for Nasdaq and CHARTER
Excellent diversification
The 3 months correlation between Nasdaq and CHARTER is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and CHARTER MUNICATIONS OPERATING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHARTER MUNICATIONS and Nasdaq 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 Nasdaq Inc are associated (or correlated) with CHARTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHARTER MUNICATIONS has no effect on the direction of Nasdaq i.e., Nasdaq and CHARTER go up and down completely randomly.
Pair Corralation between Nasdaq and CHARTER
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.93 times more return on investment than CHARTER. However, Nasdaq Inc is 1.07 times less risky than CHARTER. It trades about 0.38 of its potential returns per unit of risk. CHARTER MUNICATIONS OPERATING is currently generating about -0.11 per unit of risk. If you would invest 7,589 in Nasdaq Inc on August 30, 2024 and sell it today you would earn a total of 716.00 from holding Nasdaq Inc or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nasdaq Inc vs. CHARTER MUNICATIONS OPERATING
Performance |
| Timeline |
| Nasdaq Inc |
| CHARTER MUNICATIONS |
Nasdaq and CHARTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and CHARTER
The main advantage of trading using opposite Nasdaq and CHARTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, CHARTER 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 will offset losses from the drop in CHARTER's long position.The idea behind Nasdaq Inc and CHARTER MUNICATIONS OPERATING 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.| CHARTER vs. AEP TEX INC | CHARTER vs. US BANK NATIONAL | CHARTER vs. Nasdaq Inc | CHARTER vs. Vertiv Holdings Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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