Correlation Between Charter Communications and FingerMotion

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

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

Diversification Opportunities for Charter Communications and FingerMotion

-0.34

Correlation Coefficient

Charter Communications  FingerMotion

Very good diversification

The 3 months correlation between Charter and FingerMotion is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion and Charter Communications 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 Charter Communications are associated (or correlated) with FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Charter Communications i.e., Charter Communications and FingerMotion go up and down completely randomly.

Pair Corralation between Charter Communications and FingerMotion

Given the investment horizon of 90 days Charter Communications is expected to under-perform the FingerMotion. But the stock apears to be less risky and, when comparing its historical volatility, Charter Communications is 1.37 times less risky than FingerMotion. The stock trades about -0.06 of its potential returns per unit of risk. The FingerMotion is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  199.00  in FingerMotion on September 15, 2024 and sell it today you would earn a total of  20.00  from holding FingerMotion or generate 10.05% return on investment over 90 days.

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

Charter Communications  vs.  FingerMotion

Charter Communications

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Charter Communications may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FingerMotion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FingerMotion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FingerMotion is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Charter Communications and FingerMotion

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

The idea behind Charter Communications and FingerMotion 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.