Correlation Between CommScope Holding and Alcatel Lucent
Can any of the company-specific risk be diversified away by investing in both CommScope Holding and Alcatel Lucent 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 CommScope Holding and Alcatel Lucent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CommScope Holding Co and Alcatel Lucent, you can compare the effects of market volatilities on CommScope Holding and Alcatel Lucent 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 CommScope Holding with a short position of Alcatel Lucent. Check out your portfolio center. Please also check ongoing floating volatility patterns of CommScope Holding and Alcatel Lucent.
Diversification Opportunities for CommScope Holding and Alcatel Lucent
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CommScope and Alcatel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CommScope Holding Co and Alcatel Lucent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcatel Lucent and CommScope Holding 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 CommScope Holding Co are associated (or correlated) with Alcatel Lucent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcatel Lucent has no effect on the direction of CommScope Holding i.e., CommScope Holding and Alcatel Lucent go up and down completely randomly.
Pair Corralation between CommScope Holding and Alcatel Lucent
If you would invest (100.00) in Alcatel Lucent on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Alcatel Lucent or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CommScope Holding Co vs. Alcatel Lucent
Performance |
| Timeline |
| CommScope Holding |
| Alcatel Lucent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CommScope Holding and Alcatel Lucent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CommScope Holding and Alcatel Lucent
The main advantage of trading using opposite CommScope Holding and Alcatel Lucent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CommScope Holding position performs unexpectedly, Alcatel Lucent 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 Alcatel Lucent will offset losses from the drop in Alcatel Lucent's long position.| CommScope Holding vs. DZS Inc | CommScope Holding vs. Harmonic | CommScope Holding vs. NETGEAR | CommScope Holding vs. Comtech Telecommunications Corp |
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Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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