Correlation Between GENTING SG and Charter Communications

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

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

Diversification Opportunities for GENTING SG and Charter Communications

-0.71

Correlation Coefficient

GENTING SG  Charter Communications

Pay attention - limited upside

The 3 months correlation between GENTING and Charter is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GENTING SG LTD and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and GENTING SG 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 GENTING SG LTD 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 GENTING SG i.e., GENTING SG and Charter Communications go up and down completely randomly.

Pair Corralation between GENTING SG and Charter Communications

Assuming the 90 days horizon GENTING SG is expected to generate 13.21 times less return on investment than Charter Communications. But when comparing it to its historical volatility, GENTING SG LTD is 1.16 times less risky than Charter Communications. It trades about 0.01 of its potential returns per unit of risk. Charter Communications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  29,630  in Charter Communications on September 5, 2024 and sell it today you would earn a total of  8,235  from holding Charter Communications or generate 27.79% return on investment over 90 days.

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

GENTING SG LTD  vs.  Charter Communications

GENTING SG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GENTING SG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GENTING SG is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Charter Communications

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 11 (%) 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.

Pair Trading with GENTING SG and Charter Communications

The main advantage of trading using opposite GENTING SG and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENTING SG 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 GENTING SG LTD 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.