Correlation Between Software Acquisition and Charter Communications

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

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

Diversification Opportunities for Software Acquisition and Charter Communications

-0.28

Correlation Coefficient

Software Acquisition  Charter Communications

Very good diversification

The 3 months correlation between Software and Charter is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Software Acquisition 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 Software Acquisition Group 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 Software Acquisition i.e., Software Acquisition and Charter Communications go up and down completely randomly.

Pair Corralation between Software Acquisition and Charter Communications

Assuming the 90 days horizon Software Acquisition Group is expected to generate 9.75 times more return on investment than Charter Communications. However, Software Acquisition is 9.75 times more volatile than Charter Communications. It trades about 0.23 of its potential returns per unit of risk. Charter Communications is currently generating about -0.22 per unit of risk. If you would invest  1.00  in Software Acquisition Group on May 18, 2025 and sell it today you would earn a total of  1.75  from holding Software Acquisition Group or generate 175.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.61%
Values	Daily Returns

Software Acquisition Group  vs.  Charter Communications

Software Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Software Acquisition Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Software Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Charter Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Software Acquisition and Charter Communications

The main advantage of trading using opposite Software Acquisition and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition 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 Software Acquisition Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.