Correlation Between COUSINS PTIES and Charter Communications

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

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

Diversification Opportunities for COUSINS PTIES and Charter Communications

0.3

Correlation Coefficient

COUSINS PTIES  Charter Communications

Weak diversification

The 3 months correlation between COUSINS and Charter is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding COUSINS PTIES INC and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and COUSINS PTIES 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 COUSINS PTIES INC are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of COUSINS PTIES i.e., COUSINS PTIES and Charter Communications go up and down completely randomly.

Pair Corralation between COUSINS PTIES and Charter Communications

Assuming the 90 days trading horizon COUSINS PTIES INC is expected to under-perform the Charter Communications. In addition to that, COUSINS PTIES is 1.03 times more volatile than Charter Communications. It trades about -0.04 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.0 per unit of volatility. If you would invest  33,565  in Charter Communications on December 23, 2024 and sell it today you would lose (180.00) from holding Charter Communications or give up 0.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

COUSINS PTIES INC  vs.  Charter Communications

COUSINS PTIES INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days COUSINS PTIES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COUSINS PTIES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Charter Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Charter Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with COUSINS PTIES and Charter Communications

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

The idea behind COUSINS PTIES INC and Charter Communications 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.