Correlation Between Disney and CommScope Holding

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

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

Diversification Opportunities for Disney and CommScope Holding

0.92

Correlation Coefficient

Disney  CommScope Holding

Almost no diversification

The 3 months correlation between Disney and CommScope is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and CommScope Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CommScope Holding and Disney 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 Walt Disney are associated (or correlated) with CommScope Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CommScope Holding has no effect on the direction of Disney i.e., Disney and CommScope Holding go up and down completely randomly.

Pair Corralation between Disney and CommScope Holding

Considering the 90-day investment horizon Disney is expected to generate 5.56 times less return on investment than CommScope Holding. But when comparing it to its historical volatility, Walt Disney is 4.55 times less risky than CommScope Holding. It trades about 0.16 of its potential returns per unit of risk. CommScope Holding Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  646.00  in CommScope Holding Co on April 23, 2025 and sell it today you would earn a total of  113.00  from holding CommScope Holding Co or generate 17.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Walt Disney  vs.  CommScope Holding Co

Walt Disney

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

CommScope Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CommScope Holding Co are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, CommScope Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Disney and CommScope Holding

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

The idea behind Walt Disney and CommScope Holding Co 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.