Correlation Between Comcast Holdings and Orange SA

Can any of the company-specific risk be diversified away by investing in both Comcast Holdings and Orange SA 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 Orange SA 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 Orange SA ADR, you can compare the effects of market volatilities on Comcast Holdings and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Holdings and Orange SA.

Diversification Opportunities for Comcast Holdings and Orange SA

-0.72

Correlation Coefficient

Comcast Holdings  Orange SA

Pay attention - limited upside

The 3 months correlation between Comcast and Orange is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Holdings Corp and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of Comcast Holdings i.e., Comcast Holdings and Orange SA go up and down completely randomly.

Pair Corralation between Comcast Holdings and Orange SA

Considering the 90-day investment horizon Comcast Holdings Corp is expected to generate 0.51 times more return on investment than Orange SA. However, Comcast Holdings Corp is 1.94 times less risky than Orange SA. It trades about 0.3 of its potential returns per unit of risk. Orange SA ADR is currently generating about -0.19 per unit of risk. If you would invest  5,900  in Comcast Holdings Corp on September 27, 2024 and sell it today you would earn a total of  140.00  from holding Comcast Holdings Corp or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	66.67%
Values	Daily Returns

Comcast Holdings Corp  vs.  Orange SA ADR

Comcast Holdings Corp

Risk-Adjusted Performance

0 of 100

Weak

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.

Orange SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Comcast Holdings and Orange SA

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

The idea behind Comcast Holdings Corp and Orange SA ADR 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.