Correlation Between Comcast Corp and Disney

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Can any of the company-specific risk be diversified away by investing in both Comcast Corp and Disney 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 Comcast Corp and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast Corp A and Walt Disney, you can compare the effects of market volatilities on Comcast Corp and Disney 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 Comcast Corp with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and Disney.

Diversification Opportunities for Comcast Corp and Disney

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Comcast and Disney is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp A and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Comcast Corp 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 Comcast Corp A are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Comcast Corp i.e., Comcast Corp and Disney go up and down completely randomly.

Pair Corralation between Comcast Corp and Disney

Assuming the 90 days horizon Comcast Corp A is expected to under-perform the Disney. But the stock apears to be less risky and, when comparing its historical volatility, Comcast Corp A is 1.2 times less risky than Disney. The stock trades about 0.0 of its potential returns per unit of risk. The Walt Disney is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  13,373  in Walt Disney on May 19, 2022 and sell it today you would lose (1,092)  from holding Walt Disney or give up 8.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Comcast Corp A  vs.  Walt Disney

 Performance (%) 
       Timeline  
Comcast Corp A 
Comcast Performance
0 of 100
Over the last 90 days Comcast Corp A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comcast Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Comcast Price Channel

Walt Disney 
Disney Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Disney reported solid returns over the last few months and may actually be approaching a breakup point.

Disney Price Channel

Comcast Corp and Disney Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comcast Corp and Disney

The main advantage of trading using opposite Comcast Corp and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.
The idea behind Comcast Corp A and Walt Disney 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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