Correlation Between Charter Communications and PATRIOT BATTERY

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

By analyzing existing cross correlation between Charter Communications and PATRIOT BATTERY METINC, you can compare the effects of market volatilities on Charter Communications and PATRIOT BATTERY 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 PATRIOT BATTERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and PATRIOT BATTERY.

Diversification Opportunities for Charter Communications and PATRIOT BATTERY

-0.79

Correlation Coefficient

Charter Communications  PATRIOT BATTERY

Pay attention - limited upside

The 3 months correlation between Charter and PATRIOT is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and PATRIOT BATTERY METINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATRIOT BATTERY METINC 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 PATRIOT BATTERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATRIOT BATTERY METINC has no effect on the direction of Charter Communications i.e., Charter Communications and PATRIOT BATTERY go up and down completely randomly.

Pair Corralation between Charter Communications and PATRIOT BATTERY

Assuming the 90 days trading horizon Charter Communications is expected to under-perform the PATRIOT BATTERY. But the stock apears to be less risky and, when comparing its historical volatility, Charter Communications is 2.55 times less risky than PATRIOT BATTERY. The stock trades about -0.2 of its potential returns per unit of risk. The PATRIOT BATTERY METINC is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  177.00  in PATRIOT BATTERY METINC on October 7, 2024 and sell it today you would earn a total of  67.00  from holding PATRIOT BATTERY METINC or generate 37.85% return on investment over 90 days.

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

Charter Communications  vs.  PATRIOT BATTERY METINC

Charter Communications

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Charter Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.

PATRIOT BATTERY METINC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Charter Communications and PATRIOT BATTERY

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

The idea behind Charter Communications and PATRIOT BATTERY METINC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.