Correlation Between Altice USA and Comcast Corp

Can any of the company-specific risk be diversified away by investing in both Altice USA and Comcast Corp 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 Altice USA and Comcast Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altice USA and Comcast Corp, you can compare the effects of market volatilities on Altice USA and Comcast Corp 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 Altice USA with a short position of Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altice USA and Comcast Corp.

Diversification Opportunities for Altice USA and Comcast Corp

0.83

Correlation Coefficient

Altice USA  Comcast Corp

Very poor diversification

The 3 months correlation between Altice and Comcast is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp and Altice USA 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 Altice USA are associated (or correlated) with Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of Altice USA i.e., Altice USA and Comcast Corp go up and down completely randomly.

Pair Corralation between Altice USA and Comcast Corp

Given the investment horizon of 90 days Altice USA is expected to generate 2.83 times more return on investment than Comcast Corp. However, Altice USA is 2.83 times more volatile than Comcast Corp. It trades about 0.14 of its potential returns per unit of risk. Comcast Corp is currently generating about 0.11 per unit of risk. If you would invest  180.00  in Altice USA on September 3, 2024 and sell it today you would earn a total of  70.00  from holding Altice USA or generate 38.89% return on investment over 90 days.

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

Altice USA  vs.  Comcast Corp

Altice USA

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altice USA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Altice USA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Comcast Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comcast Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Comcast Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altice USA and Comcast Corp

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

The idea behind Altice USA and Comcast Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.