Correlation Between Hua Hong and Nexstar Media
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Nexstar Media 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 Hua Hong and Nexstar Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Nexstar Media Group, you can compare the effects of market volatilities on Hua Hong and Nexstar Media 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 Hua Hong with a short position of Nexstar Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Nexstar Media.
Diversification Opportunities for Hua Hong and Nexstar Media
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hua and Nexstar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Nexstar Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Media Group and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Nexstar Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Media Group has no effect on the direction of Hua Hong i.e., Hua Hong and Nexstar Media go up and down completely randomly.
Pair Corralation between Hua Hong and Nexstar Media
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 2.19 times more return on investment than Nexstar Media. However, Hua Hong is 2.19 times more volatile than Nexstar Media Group. It trades about 0.1 of its potential returns per unit of risk. Nexstar Media Group is currently generating about -0.12 per unit of risk. If you would invest 278.00 in Hua Hong Semiconductor on October 30, 2024 and sell it today you would earn a total of 16.00 from holding Hua Hong Semiconductor or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Nexstar Media Group
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Nexstar Media Group |
Hua Hong and Nexstar Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Nexstar Media
The main advantage of trading using opposite Hua Hong and Nexstar Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Nexstar Media 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 Nexstar Media will offset losses from the drop in Nexstar Media's long position.| Hua Hong vs. Perseus Mining Limited | Hua Hong vs. Stag Industrial | Hua Hong vs. Compagnie Plastic Omnium | Hua Hong vs. Heidelberg Materials AG |
| Nexstar Media vs. Indutrade AB | Nexstar Media vs. SOGECLAIR SA INH | Nexstar Media vs. Carsales | Nexstar Media vs. Alaska Air Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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