Correlation Between Altice USA and TIM Participacoes

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

By analyzing existing cross correlation between Altice USA and TIM Participacoes SA, you can compare the effects of market volatilities on Altice USA and TIM Participacoes 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 TIM Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altice USA and TIM Participacoes.

Diversification Opportunities for Altice USA and TIM Participacoes

-0.24

Correlation Coefficient

Altice USA  TIM Participacoes

Very good diversification

The 3 months correlation between Altice and TIM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Altice USA and TIM Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM Participacoes 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 TIM Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM Participacoes has no effect on the direction of Altice USA i.e., Altice USA and TIM Participacoes go up and down completely randomly.

Pair Corralation between Altice USA and TIM Participacoes

Given the investment horizon of 90 days Altice USA is expected to generate 2.11 times more return on investment than TIM Participacoes. However, Altice USA is 2.11 times more volatile than TIM Participacoes SA. It trades about 0.11 of its potential returns per unit of risk. TIM Participacoes SA is currently generating about 0.16 per unit of risk. If you would invest  221.00  in Altice USA on April 20, 2025 and sell it today you would earn a total of  58.00  from holding Altice USA or generate 26.24% return on investment over 90 days.

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

Altice USA  vs.  TIM Participacoes SA

Altice USA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altice USA are ranked lower than 8 (%) 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.

TIM Participacoes

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TIM Participacoes SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, TIM Participacoes sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altice USA and TIM Participacoes

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

The idea behind Altice USA and TIM Participacoes SA 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.