Correlation Between Access Power and Cable One

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

By analyzing existing cross correlation between Access Power Co and Cable One, you can compare the effects of market volatilities on Access Power 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 Access Power with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Power and Cable One.

Diversification Opportunities for Access Power and Cable One

-0.84

Correlation Coefficient

Access Power  Cable One

Pay attention - limited upside

The 3 months correlation between Access and Cable is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Access Power Co and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Access Power 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 Access Power Co 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 Access Power i.e., Access Power and Cable One go up and down completely randomly.

Pair Corralation between Access Power and Cable One

Given the investment horizon of 90 days Access Power Co is expected to generate 6.42 times more return on investment than Cable One. However, Access Power is 6.42 times more volatile than Cable One. It trades about 0.13 of its potential returns per unit of risk. Cable One is currently generating about -0.15 per unit of risk. If you would invest  0.15  in Access Power Co on December 19, 2024 and sell it today you would earn a total of  0.12  from holding Access Power Co or generate 80.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Access Power Co  vs.  Cable One

Access Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Access Power Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Access Power reported solid returns over the last few months and may actually be approaching a breakup point.

Cable One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cable One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Access Power and Cable One

The main advantage of trading using opposite Access Power and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Power 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.

The idea behind Access Power Co and Cable One 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.