Correlation Between Comcast Holdings and Citizens

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

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

Diversification Opportunities for Comcast Holdings and Citizens

0.51

Correlation Coefficient

Comcast Holdings  Citizens

Very weak diversification

The 3 months correlation between Comcast and Citizens is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Holdings Corp and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Comcast Holdings 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 Comcast Holdings Corp are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Comcast Holdings i.e., Comcast Holdings and Citizens go up and down completely randomly.

Pair Corralation between Comcast Holdings and Citizens

Considering the 90-day investment horizon Comcast Holdings is expected to generate 4.13 times less return on investment than Citizens. But when comparing it to its historical volatility, Comcast Holdings Corp is 6.23 times less risky than Citizens. It trades about 0.07 of its potential returns per unit of risk. Citizens is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  379.00  in Citizens on October 3, 2024 and sell it today you would earn a total of  22.00  from holding Citizens or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	82.26%
Values	Daily Returns

Comcast Holdings Corp  vs.  Citizens

Comcast Holdings Corp

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Comcast Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Comcast Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citizens

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Citizens sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comcast Holdings and Citizens

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

The idea behind Comcast Holdings Corp and Citizens 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.