Correlation Between WideOpenWest and Comcast

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

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

Diversification Opportunities for WideOpenWest and Comcast

0.49

Correlation Coefficient

WideOpenWest  Comcast

Very weak diversification

The 3 months correlation between WideOpenWest and Comcast is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding WideOpenWest and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast and WideOpenWest 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 WideOpenWest are associated (or correlated) with Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of WideOpenWest i.e., WideOpenWest and Comcast go up and down completely randomly.

Pair Corralation between WideOpenWest and Comcast

Assuming the 90 days horizon WideOpenWest is expected to generate 7.35 times less return on investment than Comcast. In addition to that, WideOpenWest is 1.8 times more volatile than Comcast. It trades about 0.01 of its total potential returns per unit of risk. Comcast is currently generating about 0.15 per unit of volatility. If you would invest  3,541  in Comcast on September 7, 2024 and sell it today you would earn a total of  507.00  from holding Comcast or generate 14.32% return on investment over 90 days.

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

WideOpenWest  vs.  Comcast

WideOpenWest

Risk-Adjusted Performance

0 of 100

Very Weak

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

Comcast

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Comcast are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Comcast reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WideOpenWest and Comcast

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

The idea behind WideOpenWest and Comcast 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.