Correlation Between Urban One and Cable One
Can any of the company-specific risk be diversified away by investing in both Urban One 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 Urban One and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban One and Cable One, you can compare the effects of market volatilities on Urban One 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 Urban One with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban One and Cable One.
Diversification Opportunities for Urban One and Cable One
Very good diversification
The 3 months correlation between Urban and Cable is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Urban One and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Urban One 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 Urban One 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 Urban One i.e., Urban One and Cable One go up and down completely randomly.
Pair Corralation between Urban One and Cable One
Given the investment horizon of 90 days Urban One is expected to generate 1.54 times less return on investment than Cable One. In addition to that, Urban One is 1.87 times more volatile than Cable One. It trades about 0.1 of its total potential returns per unit of risk. Cable One is currently generating about 0.29 per unit of volatility. If you would invest 33,801 in Cable One on August 30, 2024 and sell it today you would earn a total of 8,156 from holding Cable One or generate 24.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban One vs. Cable One
Performance |
| Timeline |
| Urban One |
| Cable One |
Urban One and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban One and Cable One
The main advantage of trading using opposite Urban One and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban One 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.| Urban One vs. TVA Group | Urban One vs. Saga Communications | Urban One vs. E W Scripps | Urban One vs. Cumulus Media Class |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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