Correlation Between TIM Participacoes and Charter Communications

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

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

Diversification Opportunities for TIM Participacoes and Charter Communications

-0.28

Correlation Coefficient

TIM Participacoes  Charter Communications

Very good diversification

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

Pair Corralation between TIM Participacoes and Charter Communications

Given the investment horizon of 90 days TIM Participacoes SA is expected to generate 0.59 times more return on investment than Charter Communications. However, TIM Participacoes SA is 1.7 times less risky than Charter Communications. It trades about 0.15 of its potential returns per unit of risk. Charter Communications is currently generating about -0.23 per unit of risk. If you would invest  1,753  in TIM Participacoes SA on May 14, 2025 and sell it today you would earn a total of  297.00  from holding TIM Participacoes SA or generate 16.94% return on investment over 90 days.

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

TIM Participacoes SA  vs.  Charter Communications

TIM Participacoes

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TIM Participacoes SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, TIM Participacoes sustained 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 TIM Participacoes and Charter Communications

The main advantage of trading using opposite TIM Participacoes and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIM Participacoes 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 TIM Participacoes SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.