Correlation Between WideOpenWest and Roku

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Can any of the company-specific risk be diversified away by investing in both WideOpenWest and Roku 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 WideOpenWest and Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WideOpenWest and Roku Inc, you can compare the effects of market volatilities on WideOpenWest and Roku 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 WideOpenWest with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of WideOpenWest and Roku.

Diversification Opportunities for WideOpenWest and Roku

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between WideOpenWest and Roku is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding WideOpenWest and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and WideOpenWest 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 WideOpenWest are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of WideOpenWest i.e., WideOpenWest and Roku go up and down completely randomly.

Pair Corralation between WideOpenWest and Roku

Assuming the 90 days horizon WideOpenWest is expected to under-perform the Roku. In addition to that, WideOpenWest is 1.16 times more volatile than Roku Inc. It trades about -0.02 of its total potential returns per unit of risk. Roku Inc is currently generating about 0.04 per unit of volatility. If you would invest  5,111  in Roku Inc on November 2, 2024 and sell it today you would earn a total of  3,112  from holding Roku Inc or generate 60.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

WideOpenWest  vs.  Roku Inc

 Performance 
       Timeline  
WideOpenWest 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WideOpenWest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Roku Inc 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Roku Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Roku reported solid returns over the last few months and may actually be approaching a breakup point.

WideOpenWest and Roku Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WideOpenWest and Roku

The main advantage of trading using opposite WideOpenWest and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WideOpenWest position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.
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The idea behind WideOpenWest and Roku Inc 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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