Correlation Between Charter Communications and Gaia

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

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

Diversification Opportunities for Charter Communications and Gaia

-0.58

Correlation Coefficient

Charter Communications  Gaia

Excellent diversification

The 3 months correlation between Charter and Gaia is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Gaia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaia Inc 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 Gaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaia Inc has no effect on the direction of Charter Communications i.e., Charter Communications and Gaia go up and down completely randomly.

Pair Corralation between Charter Communications and Gaia

Given the investment horizon of 90 days Charter Communications is expected to under-perform the Gaia. But the stock apears to be less risky and, when comparing its historical volatility, Charter Communications is 2.89 times less risky than Gaia. The stock trades about -0.2 of its potential returns per unit of risk. The Gaia Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  348.00  in Gaia Inc on February 2, 2024 and sell it today you would earn a total of  27.00  from holding Gaia Inc or generate 7.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Charter Communications  vs.  Gaia Inc

Charter Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Gaia Inc

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Charter Communications and Gaia

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

The idea behind Charter Communications and Gaia Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.