Correlation Between Beasley Broadcast and Gray Television
Can any of the company-specific risk be diversified away by investing in both Beasley Broadcast and Gray Television 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 Beasley Broadcast and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beasley Broadcast Group and Gray Television, you can compare the effects of market volatilities on Beasley Broadcast and Gray Television 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 Beasley Broadcast with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beasley Broadcast and Gray Television.
Diversification Opportunities for Beasley Broadcast and Gray Television
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beasley and Gray is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Beasley Broadcast Group and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and Beasley Broadcast 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 Beasley Broadcast Group are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of Beasley Broadcast i.e., Beasley Broadcast and Gray Television go up and down completely randomly.
Pair Corralation between Beasley Broadcast and Gray Television
Given the investment horizon of 90 days Beasley Broadcast Group is expected to under-perform the Gray Television. But the stock apears to be less risky and, when comparing its historical volatility, Beasley Broadcast Group is 1.4 times less risky than Gray Television. The stock trades about -0.28 of its potential returns per unit of risk. The Gray Television is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 713.00 in Gray Television on January 12, 2025 and sell it today you would lose (2.00) from holding Gray Television or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beasley Broadcast Group vs. Gray Television
Performance |
| Timeline |
| Beasley Broadcast |
| Gray Television |
Beasley Broadcast and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beasley Broadcast and Gray Television
The main advantage of trading using opposite Beasley Broadcast and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beasley Broadcast position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| Beasley Broadcast vs. ProSiebenSat1 Media AG | Beasley Broadcast vs. RTL Group SA | Beasley Broadcast vs. Mediaco Holding | Beasley Broadcast vs. iHeartMedia |
| Gray Television vs. Haverty Furniture Companies | Gray Television vs. Liberty Global PLC | Gray Television vs. Gray Television | Gray Television vs. Greif Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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