Correlation Between Charter Communications and TC Traders

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

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

Diversification Opportunities for Charter Communications and TC Traders

0.22

Correlation Coefficient

Charter Communications  TC Traders

Modest diversification

The 3 months correlation between Charter and TRAD3 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and TC Traders Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Traders Club 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 TC Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Traders Club has no effect on the direction of Charter Communications i.e., Charter Communications and TC Traders go up and down completely randomly.

Pair Corralation between Charter Communications and TC Traders

Assuming the 90 days trading horizon Charter Communications is expected to generate 3.63 times less return on investment than TC Traders. But when comparing it to its historical volatility, Charter Communications is 2.18 times less risky than TC Traders. It trades about 0.04 of its potential returns per unit of risk. TC Traders Club is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  660.00  in TC Traders Club on April 25, 2025 and sell it today you would earn a total of  85.00  from holding TC Traders Club or generate 12.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Charter Communications  vs.  TC Traders Club

Charter Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Charter Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TC Traders Club

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TC Traders Club are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, TC Traders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Charter Communications and TC Traders

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

The idea behind Charter Communications and TC Traders Club 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.