Correlation Between Renren and Charter Communications

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Renren 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 Renren and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renren Inc and Charter Communications, you can compare the effects of market volatilities on Renren 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 Renren with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renren and Charter Communications.

Diversification Opportunities for Renren and Charter Communications

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Renren and Charter is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Renren Inc and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Renren 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 Renren Inc 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 Renren i.e., Renren and Charter Communications go up and down completely randomly.

Pair Corralation between Renren and Charter Communications

Given the investment horizon of 90 days Renren Inc is expected to under-perform the Charter Communications. In addition to that, Renren is 2.88 times more volatile than Charter Communications. It trades about -0.06 of its total potential returns per unit of risk. Charter Communications is currently generating about -0.03 per unit of volatility. If you would invest  46,540  in Charter Communications on December 29, 2023 and sell it today you would lose (17,189) from holding Charter Communications or give up 36.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy65.9%
ValuesDaily Returns

Renren Inc  vs.  Charter Communications

 Performance 
       Timeline  
Renren Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Renren Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Renren is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Charter Communications 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Renren and Charter Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Renren and Charter Communications

The main advantage of trading using opposite Renren and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renren 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 Renren Inc 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.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Commodity Directory
Find actively traded commodities issued by global exchanges
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
FinTech Suite
Use AI to screen and filter profitable investment opportunities