Correlation Between Charter Communications and SCOR SE

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

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

Diversification Opportunities for Charter Communications and SCOR SE

0.35

Correlation Coefficient

Charter Communications  SCOR SE

Weak diversification

The 3 months correlation between Charter and SCOR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE 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 SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of Charter Communications i.e., Charter Communications and SCOR SE go up and down completely randomly.

Pair Corralation between Charter Communications and SCOR SE

Assuming the 90 days trading horizon Charter Communications is expected to under-perform the SCOR SE. In addition to that, Charter Communications is 1.03 times more volatile than SCOR SE. It trades about -0.04 of its total potential returns per unit of risk. SCOR SE is currently generating about 0.19 per unit of volatility. If you would invest  2,310  in SCOR SE on December 20, 2024 and sell it today you would earn a total of  438.00  from holding SCOR SE or generate 18.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Charter Communications  vs.  SCOR SE

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.

SCOR SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SCOR SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Charter Communications and SCOR SE

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

The idea behind Charter Communications and SCOR SE 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.