Correlation Between Cable One and Real Estate

Can any of the company-specific risk be diversified away by investing in both Cable One and Real Estate 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 Cable One and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cable One and Real Estate Investment, you can compare the effects of market volatilities on Cable One and Real Estate 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 Cable One with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Real Estate.

Diversification Opportunities for Cable One and Real Estate

-0.72

Correlation Coefficient

Cable One  Real Estate

Pay attention - limited upside

The 3 months correlation between Cable and Real is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Real Estate Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Investment and Cable One 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 Cable One are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Investment has no effect on the direction of Cable One i.e., Cable One and Real Estate go up and down completely randomly.

Pair Corralation between Cable One and Real Estate

Assuming the 90 days trading horizon Cable One is expected to generate 1.54 times more return on investment than Real Estate. However, Cable One is 1.54 times more volatile than Real Estate Investment. It trades about 0.13 of its potential returns per unit of risk. Real Estate Investment is currently generating about -0.1 per unit of risk. If you would invest  952.00  in Cable One on September 29, 2024 and sell it today you would earn a total of  175.00  from holding Cable One or generate 18.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Cable One  vs.  Real Estate Investment

Cable One

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cable One sustained solid returns over the last few months and may actually be approaching a breakup point.

Real Estate Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate Investment has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Cable One and Real Estate

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

The idea behind Cable One and Real Estate Investment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..