Correlation Between Consolidated Communications and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications and GREENLIGHT CAP 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 Consolidated Communications and GREENLIGHT CAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and GREENLIGHT CAP RE, you can compare the effects of market volatilities on Consolidated Communications and GREENLIGHT CAP 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 Consolidated Communications with a short position of GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and GREENLIGHT CAP.
Diversification Opportunities for Consolidated Communications and GREENLIGHT CAP
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Consolidated and GREENLIGHT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE and Consolidated 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 Consolidated Communications Holdings are associated (or correlated) with GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of Consolidated Communications i.e., Consolidated Communications and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between Consolidated Communications and GREENLIGHT CAP
Assuming the 90 days horizon Consolidated Communications is expected to generate 1.44 times less return on investment than GREENLIGHT CAP. In addition to that, Consolidated Communications is 1.6 times more volatile than GREENLIGHT CAP RE. It trades about 0.03 of its total potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.06 per unit of volatility. If you would invest 870.00 in GREENLIGHT CAP RE on October 22, 2024 and sell it today you would earn a total of 490.00 from holding GREENLIGHT CAP RE or generate 56.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.6% |
Values | Daily Returns |
Consolidated Communications Ho vs. GREENLIGHT CAP RE
Performance |
Timeline |
Consolidated Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
GREENLIGHT CAP RE |
Consolidated Communications and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Consolidated Communications and GREENLIGHT CAP
The main advantage of trading using opposite Consolidated Communications and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications position performs unexpectedly, GREENLIGHT CAP 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 GREENLIGHT CAP will offset losses from the drop in GREENLIGHT CAP's long position.Consolidated Communications vs. Zoom Video Communications | Consolidated Communications vs. Boyd Gaming | Consolidated Communications vs. PENN NATL GAMING | Consolidated Communications vs. QINGCI GAMES INC |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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