Correlation Between Charter Communications and Triad Group

Can any of the company-specific risk be diversified away by investing in both Charter Communications and Triad Group 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 Triad Group 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 Triad Group PLC, you can compare the effects of market volatilities on Charter Communications and Triad Group 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 Triad Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Triad Group.

Diversification Opportunities for Charter Communications and Triad Group

0.43

Correlation Coefficient

Charter Communications  Triad Group

Very weak diversification

The 3 months correlation between Charter and Triad is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group PLC 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 Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of Charter Communications i.e., Charter Communications and Triad Group go up and down completely randomly.

Pair Corralation between Charter Communications and Triad Group

Assuming the 90 days trading horizon Charter Communications Cl is expected to under-perform the Triad Group. In addition to that, Charter Communications is 1.15 times more volatile than Triad Group PLC. It trades about -0.34 of its total potential returns per unit of risk. Triad Group PLC is currently generating about 0.01 per unit of volatility. If you would invest  29,000  in Triad Group PLC on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Triad Group PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Charter Communications Cl  vs.  Triad Group PLC

Charter Communications

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications Cl are ranked lower than 3 (%) 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 February 2025.

Triad Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triad Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Triad Group is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Charter Communications and Triad Group

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

The idea behind Charter Communications Cl and Triad Group PLC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.