Correlation Between United States and Cable One
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Cable One, you can compare the effects of market volatilities on United States 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 United States with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Cable One.
Diversification Opportunities for United States and Cable One
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Cable is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and United States 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 United States Steel 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 United States i.e., United States and Cable One go up and down completely randomly.
Pair Corralation between United States and Cable One
Assuming the 90 days trading horizon United States Steel is expected to under-perform the Cable One. In addition to that, United States is 1.13 times more volatile than Cable One. It trades about -0.16 of its total potential returns per unit of risk. Cable One is currently generating about -0.03 per unit of volatility. If you would invest 1,170 in Cable One on September 15, 2024 and sell it today you would lose (20.00) from holding Cable One or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
United States Steel vs. Cable One
Performance |
| Timeline |
| United States Steel |
| Cable One |
United States and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Cable One
The main advantage of trading using opposite United States and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Companhia Siderrgica Nacional | United States vs. Metalurgica Gerdau SA | United States vs. Metalurgica Gerdau SA | United States vs. Usinas Siderrgicas de |
| Cable One vs. Multilaser Industrial SA | Cable One vs. Automatic Data Processing | Cable One vs. Brpr Corporate Offices | Cable One vs. United Rentals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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