Correlation Between PENINSULA ENERG and Charter Communications

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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 Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PENINSULA ENERG  vs.  Charter Communications

 Performance 
       Timeline  
PENINSULA ENERG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PENINSULA ENERG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Charter Communications 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
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 fragile basic indicators, Charter Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind PENINSULA ENERG 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.
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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