Correlation Between Charter Communications and Target

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

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

Diversification Opportunities for Charter Communications and Target

0.03

Correlation Coefficient

Charter Communications  Target

Significant diversification

The 3 months correlation between Charter and Target is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target and Charter Communications 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 Charter Communications are associated (or correlated) with Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Charter Communications i.e., Charter Communications and Target go up and down completely randomly.

Pair Corralation between Charter Communications and Target

Assuming the 90 days trading horizon Charter Communications is expected to generate 0.9 times more return on investment than Target. However, Charter Communications is 1.12 times less risky than Target. It trades about 0.02 of its potential returns per unit of risk. Target is currently generating about 0.01 per unit of risk. If you would invest  3,186  in Charter Communications on April 20, 2025 and sell it today you would earn a total of  354.00  from holding Charter Communications or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.28%
Values	Daily Returns

Charter Communications  vs.  Target

Charter Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Charter Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Target

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Target are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Target may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Charter Communications and Target

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

The idea behind Charter Communications and Target 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.