Correlation Between Comcast Corp and TMX Group

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

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

Diversification Opportunities for Comcast Corp and TMX Group

0.2

Correlation Coefficient

Comcast Corp  TMX Group

Modest diversification

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

Pair Corralation between Comcast Corp and TMX Group

Assuming the 90 days horizon Comcast Corp is expected to under-perform the TMX Group. In addition to that, Comcast Corp is 1.08 times more volatile than TMX Group Limited. It trades about -0.02 of its total potential returns per unit of risk. TMX Group Limited is currently generating about 0.05 per unit of volatility. If you would invest  5,498  in TMX Group Limited on May 1, 2025 and sell it today you would earn a total of  181.00  from holding TMX Group Limited or generate 3.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Comcast Corp  vs.  TMX Group Limited

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.

TMX Group Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMX Group Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, TMX Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Comcast Corp and TMX Group

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

The idea behind Comcast Corp and TMX Group Limited 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.