Correlation Between PENINSULA ENERG and Charter Communications
Can any of the company-specific risk be diversified away by investing in both PENINSULA ENERG 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 PENINSULA ENERG and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENINSULA ENERG and Charter Communications, you can compare the effects of market volatilities on PENINSULA ENERG 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 PENINSULA ENERG with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENINSULA ENERG and Charter Communications.
Diversification Opportunities for PENINSULA ENERG and Charter Communications
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PENINSULA and Charter is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PENINSULA ENERG and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and PENINSULA ENERG 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 PENINSULA ENERG 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 PENINSULA ENERG i.e., PENINSULA ENERG and Charter Communications go up and down completely randomly.
Pair Corralation between PENINSULA ENERG and Charter Communications
Assuming the 90 days trading horizon PENINSULA ENERG is expected to under-perform the Charter Communications. In addition to that, PENINSULA ENERG is 1.82 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 0.09 per unit of volatility. If you would invest 29,785 in Charter Communications on October 8, 2024 and sell it today you would earn a total of 4,880 from holding Charter Communications or generate 16.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PENINSULA ENERG vs. Charter Communications
Performance |
Timeline |
PENINSULA ENERG |
Charter Communications |
PENINSULA ENERG and Charter Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PENINSULA ENERG and Charter Communications
The main advantage of trading using opposite PENINSULA ENERG and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENINSULA ENERG 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.PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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