Correlation Between Comcast and Paramount Global
Can any of the company-specific risk be diversified away by investing in both Comcast and Paramount Global 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 and Paramount Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast and Paramount Global, you can compare the effects of market volatilities on Comcast and Paramount Global 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 with a short position of Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast and Paramount Global.
Diversification Opportunities for Comcast and Paramount Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comcast and Paramount is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Comcast and Paramount Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global and Comcast 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 are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global has no effect on the direction of Comcast i.e., Comcast and Paramount Global go up and down completely randomly.
Pair Corralation between Comcast and Paramount Global
Assuming the 90 days trading horizon Comcast is expected to under-perform the Paramount Global. But the stock apears to be less risky and, when comparing its historical volatility, Comcast is 1.27 times less risky than Paramount Global. The stock trades about -0.11 of its potential returns per unit of risk. The Paramount Global is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,455 in Paramount Global on September 25, 2024 and sell it today you would lose (17.00) from holding Paramount Global or give up 0.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Comcast vs. Paramount Global
Performance |
Timeline |
Comcast |
Paramount Global |
Comcast and Paramount Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Comcast and Paramount Global
The main advantage of trading using opposite Comcast and Paramount Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast position performs unexpectedly, Paramount Global 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 Paramount Global will offset losses from the drop in Paramount Global's long position.Comcast vs. United Airlines Holdings | Comcast vs. Broadcom | Comcast vs. Electronic Arts | Comcast vs. Ross Stores |
Paramount Global vs. Comcast | Paramount Global vs. Charter Communications | Paramount Global vs. Warner Music Group | Paramount Global vs. DCVY34 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |