Correlation Between CuriosityStream and Charter Communications

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

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

Diversification Opportunities for CuriosityStream and Charter Communications

0.67

Correlation Coefficient

CuriosityStream  Charter Communications

Poor diversification

The 3 months correlation between CuriosityStream and Charter is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CuriosityStream and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and CuriosityStream 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 CuriosityStream are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of CuriosityStream i.e., CuriosityStream and Charter Communications go up and down completely randomly.

Pair Corralation between CuriosityStream and Charter Communications

Assuming the 90 days horizon CuriosityStream is expected to generate 22.23 times more return on investment than Charter Communications. However, CuriosityStream is 22.23 times more volatile than Charter Communications. It trades about 0.13 of its potential returns per unit of risk. Charter Communications is currently generating about 0.11 per unit of risk. If you would invest  3.00  in CuriosityStream on February 17, 2025 and sell it today you would earn a total of  6.00  from holding CuriosityStream or generate 200.0% return on investment over 90 days.

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

CuriosityStream  vs.  Charter Communications

CuriosityStream

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

Charter Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Charter Communications reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CuriosityStream and Charter Communications

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

The idea behind CuriosityStream and Charter Communications 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.