Correlation Between Charter Communications and Immofinanz

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

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

Diversification Opportunities for Charter Communications and Immofinanz

-0.26

Correlation Coefficient

Charter Communications  Immofinanz

Very good diversification

The 3 months correlation between Charter and Immofinanz is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Immofinanz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofinanz AG and Charter 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 Charter Communications are associated (or correlated) with Immofinanz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofinanz AG has no effect on the direction of Charter Communications i.e., Charter Communications and Immofinanz go up and down completely randomly.

Pair Corralation between Charter Communications and Immofinanz

Assuming the 90 days trading horizon Charter Communications is expected to under-perform the Immofinanz. In addition to that, Charter Communications is 1.18 times more volatile than Immofinanz AG. It trades about -0.06 of its total potential returns per unit of risk. Immofinanz AG is currently generating about 0.05 per unit of volatility. If you would invest  1,568  in Immofinanz AG on December 2, 2024 and sell it today you would earn a total of  68.00  from holding Immofinanz AG or generate 4.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Charter Communications  vs.  Immofinanz AG

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Immofinanz AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immofinanz AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Immofinanz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Charter Communications and Immofinanz

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

The idea behind Charter Communications and Immofinanz AG 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.