Correlation Between Comcast Corp and Orange SA

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

By analyzing existing cross correlation between Comcast Corp and Orange SA ADR, you can compare the effects of market volatilities on Comcast Corp and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and Orange SA.

Diversification Opportunities for Comcast Corp and Orange SA

0.76

Correlation Coefficient

Comcast Corp  Orange SA

Poor diversification

The 3 months correlation between Comcast and Orange is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 are associated (or correlated) with Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of Comcast Corp i.e., Comcast Corp and Orange SA go up and down completely randomly.

Pair Corralation between Comcast Corp and Orange SA

Assuming the 90 days horizon Comcast Corp is expected to under-perform the Orange SA. In addition to that, Comcast Corp is 1.26 times more volatile than Orange SA ADR. It trades about -0.16 of its total potential returns per unit of risk. Orange SA ADR is currently generating about -0.13 per unit of volatility. If you would invest  1,169  in Orange SA ADR on February 4, 2024 and sell it today you would lose (47.00) from holding Orange SA ADR or give up 4.02% of portfolio value over 90 days.

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

Comcast Corp  vs.  Orange SA ADR

Comcast Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Orange SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orange SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Orange SA is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Comcast Corp and Orange SA

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

The idea behind Comcast Corp and Orange SA ADR 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.