Correlation Between Orange SA and Comcast Corp
Can any of the company-specific risk be diversified away by investing in both Orange SA 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 Orange SA and Comcast Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA ADR and Comcast Corp, you can compare the effects of market volatilities on Orange SA 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 Orange SA with a short position of Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and Comcast Corp.
Diversification Opportunities for Orange SA and Comcast Corp
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orange and Comcast is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp and Orange SA 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 Orange SA ADR 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 Orange SA i.e., Orange SA and Comcast Corp go up and down completely randomly.
Pair Corralation between Orange SA and Comcast Corp
Given the investment horizon of 90 days Orange SA is expected to generate 1.6 times less return on investment than Comcast Corp. But when comparing it to its historical volatility, Orange SA ADR is 1.42 times less risky than Comcast Corp. It trades about 0.04 of its potential returns per unit of risk. Comcast Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,382 in Comcast Corp on August 23, 2024 and sell it today you would earn a total of 968.00 from holding Comcast Corp or generate 28.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange SA ADR vs. Comcast Corp
Performance |
| Timeline |
| Orange SA ADR |
| Comcast Corp |
Orange SA and Comcast Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and Comcast Corp
The main advantage of trading using opposite Orange SA and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA 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.| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
| Comcast Corp vs. Small Cap Core | Comcast Corp vs. FitLife Brands, Common | Comcast Corp vs. Mutual Of America | Comcast Corp vs. Gfl Environmental Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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