Correlation Between Comcast Corp and Gates Industrial

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

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

Diversification Opportunities for Comcast Corp and Gates Industrial

-0.2

Correlation Coefficient

Comcast Corp  Gates Industrial

Good diversification

The 3 months correlation between Comcast and Gates is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and Gates Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gates Industrial and Comcast Corp 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 Comcast Corp are associated (or correlated) with Gates Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gates Industrial has no effect on the direction of Comcast Corp i.e., Comcast Corp and Gates Industrial go up and down completely randomly.

Pair Corralation between Comcast Corp and Gates Industrial

Assuming the 90 days horizon Comcast Corp is expected to under-perform the Gates Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Comcast Corp is 1.04 times less risky than Gates Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The Gates Industrial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,130  in Gates Industrial on May 21, 2025 and sell it today you would earn a total of  315.00  from holding Gates Industrial or generate 14.79% return on investment over 90 days.

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

Comcast Corp  vs.  Gates Industrial

Comcast Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comcast Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gates Industrial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gates Industrial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Gates Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comcast Corp and Gates Industrial

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

The idea behind Comcast Corp and Gates Industrial 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.