Correlation Between Color Star and Altice USA

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

By analyzing existing cross correlation between Color Star Technology and Altice USA, you can compare the effects of market volatilities on Color Star and Altice USA 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 Color Star with a short position of Altice USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and Altice USA.

Diversification Opportunities for Color Star and Altice USA

-0.45

Correlation Coefficient

Color Star  Altice USA

Very good diversification

The 3 months correlation between Color and Altice is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and Altice USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice USA and Color Star 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 Color Star Technology are associated (or correlated) with Altice USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice USA has no effect on the direction of Color Star i.e., Color Star and Altice USA go up and down completely randomly.

Pair Corralation between Color Star and Altice USA

Considering the 90-day investment horizon Color Star Technology is expected to under-perform the Altice USA. In addition to that, Color Star is 3.92 times more volatile than Altice USA. It trades about -0.18 of its total potential returns per unit of risk. Altice USA is currently generating about 0.15 per unit of volatility. If you would invest  184.00  in Altice USA on August 30, 2024 and sell it today you would earn a total of  76.00  from holding Altice USA or generate 41.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Color Star Technology  vs.  Altice USA

Color Star Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Altice USA

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altice USA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Altice USA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Color Star and Altice USA

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

The idea behind Color Star Technology and Altice USA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.