Correlation Between Cable One and S1YM34

Can any of the company-specific risk be diversified away by investing in both Cable One and S1YM34 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 Cable One and S1YM34 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cable One and S1YM34, you can compare the effects of market volatilities on Cable One and S1YM34 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 Cable One with a short position of S1YM34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and S1YM34.

Diversification Opportunities for Cable One and S1YM34

0.83

Correlation Coefficient

Cable One  S1YM34

Very poor diversification

The 3 months correlation between Cable and S1YM34 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and S1YM34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S1YM34 and Cable One 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 Cable One are associated (or correlated) with S1YM34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S1YM34 has no effect on the direction of Cable One i.e., Cable One and S1YM34 go up and down completely randomly.

Pair Corralation between Cable One and S1YM34

Assuming the 90 days trading horizon Cable One is expected to under-perform the S1YM34. In addition to that, Cable One is 1.52 times more volatile than S1YM34. It trades about -0.03 of its total potential returns per unit of risk. S1YM34 is currently generating about 0.05 per unit of volatility. If you would invest  11,914  in S1YM34 on September 23, 2024 and sell it today you would earn a total of  5,979  from holding S1YM34 or generate 50.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	68.75%
Values	Daily Returns

Cable One  vs.  S1YM34

Cable One

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cable One sustained solid returns over the last few months and may actually be approaching a breakup point.

S1YM34

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in S1YM34 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, S1YM34 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cable One and S1YM34

The main advantage of trading using opposite Cable One and S1YM34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, S1YM34 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 S1YM34 will offset losses from the drop in S1YM34's long position.

The idea behind Cable One and S1YM34 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.