Correlation Between Cable One and World Wrestling

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

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

Diversification Opportunities for Cable One and World Wrestling

-0.33

Correlation Coefficient

Cable One  World Wrestling

Very good diversification

The 3 months correlation between Cable and World is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and World Wrestling Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Wrestling Ente and Cable One 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 Cable One are associated (or correlated) with World Wrestling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Wrestling Ente has no effect on the direction of Cable One i.e., Cable One and World Wrestling go up and down completely randomly.

Pair Corralation between Cable One and World Wrestling

If you would invest  10,065  in World Wrestling Entertainment on January 20, 2024 and sell it today you would earn a total of  0.00  from holding World Wrestling Entertainment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

Cable One  vs.  World Wrestling Entertainment

Cable One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cable One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

World Wrestling Ente

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Wrestling Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, World Wrestling is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cable One and World Wrestling

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

The idea behind Cable One and World Wrestling Entertainment 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.