Correlation Between Comcast Corp and Small Capitalization

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

By analyzing existing cross correlation between Comcast Corp and Small Capitalization Portfolio, you can compare the effects of market volatilities on Comcast Corp and Small Capitalization 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 Small Capitalization. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and Small Capitalization.

Diversification Opportunities for Comcast Corp and Small Capitalization

0.3

Correlation Coefficient

Comcast Corp  Small Capitalization

Weak diversification

The 3 months correlation between Comcast and Small is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and Small Capitalization Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Capitalization 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 Small Capitalization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Capitalization has no effect on the direction of Comcast Corp i.e., Comcast Corp and Small Capitalization go up and down completely randomly.

Pair Corralation between Comcast Corp and Small Capitalization

Assuming the 90 days horizon Comcast Corp is expected to generate 0.47 times more return on investment than Small Capitalization. However, Comcast Corp is 2.12 times less risky than Small Capitalization. It trades about -0.03 of its potential returns per unit of risk. Small Capitalization Portfolio is currently generating about -0.03 per unit of risk. If you would invest  4,314  in Comcast Corp on May 1, 2025 and sell it today you would lose (1,031) from holding Comcast Corp or give up 23.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Comcast Corp  vs.  Small Capitalization Portfolio

Comcast Corp

Risk-Adjusted Performance

Very Weak

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.

Small Capitalization

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Small Capitalization Portfolio are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Small Capitalization may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Comcast Corp and Small Capitalization

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

The idea behind Comcast Corp and Small Capitalization Portfolio 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.