Correlation Between Charter Communications and Atresmedia

Can any of the company-specific risk be diversified away by investing in both Charter Communications and Atresmedia 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 Charter Communications and Atresmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charter Communications Cl and Atresmedia, you can compare the effects of market volatilities on Charter Communications and Atresmedia 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 Charter Communications with a short position of Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Atresmedia.

Diversification Opportunities for Charter Communications and Atresmedia

0.5

Correlation Coefficient

Charter Communications  Atresmedia

Very weak diversification

The 3 months correlation between Charter and Atresmedia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia and Charter Communications 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 Charter Communications Cl are associated (or correlated) with Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Charter Communications i.e., Charter Communications and Atresmedia go up and down completely randomly.

Pair Corralation between Charter Communications and Atresmedia

Assuming the 90 days trading horizon Charter Communications is expected to generate 2.88 times less return on investment than Atresmedia. In addition to that, Charter Communications is 2.0 times more volatile than Atresmedia. It trades about 0.05 of its total potential returns per unit of risk. Atresmedia is currently generating about 0.31 per unit of volatility. If you would invest  435.00  in Atresmedia on December 25, 2024 and sell it today you would earn a total of  89.00  from holding Atresmedia or generate 20.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Charter Communications Cl  vs.  Atresmedia

Charter Communications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications Cl are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Charter Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Atresmedia

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atresmedia are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Atresmedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Charter Communications and Atresmedia

The main advantage of trading using opposite Charter Communications and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.

The idea behind Charter Communications Cl and Atresmedia 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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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.