Correlation Between Directv and SCANA

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

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

Diversification Opportunities for Directv and SCANA

0.0

Correlation Coefficient

Directv  SCANA

Pay attention - limited upside

The 3 months correlation between Directv and SCANA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DIRECTV and SCANA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANA and Directv 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 DIRECTV are associated (or correlated) with SCANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANA has no effect on the direction of Directv i.e., Directv and SCANA go up and down completely randomly.

Pair Corralation between Directv and SCANA

If you would invest (100.00) in SCANA on January 20, 2024 and sell it today you would earn a total of  100.00  from holding SCANA or generate -100.0% return on investment over 90 days.

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

DIRECTV  vs.  SCANA

DIRECTV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DIRECTV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Directv is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SCANA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, SCANA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Directv and SCANA

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

The idea behind DIRECTV and SCANA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.