Correlation Between Beasley Broadcast and ITV Plc
Can any of the company-specific risk be diversified away by investing in both Beasley Broadcast and ITV Plc 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 ITV Plc 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 ITV plc, you can compare the effects of market volatilities on Beasley Broadcast and ITV Plc 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 ITV Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beasley Broadcast and ITV Plc.
Diversification Opportunities for Beasley Broadcast and ITV Plc
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beasley and ITV is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Beasley Broadcast Group and ITV plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV plc 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 ITV Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV plc has no effect on the direction of Beasley Broadcast i.e., Beasley Broadcast and ITV Plc go up and down completely randomly.
Pair Corralation between Beasley Broadcast and ITV Plc
Given the investment horizon of 90 days Beasley Broadcast Group is expected to under-perform the ITV Plc. In addition to that, Beasley Broadcast is 1.15 times more volatile than ITV plc. It trades about -0.32 of its total potential returns per unit of risk. ITV plc is currently generating about -0.22 per unit of volatility. If you would invest 101.00 in ITV plc on August 28, 2024 and sell it today you would lose (20.00) from holding ITV plc or give up 19.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Beasley Broadcast Group vs. ITV plc
Performance |
| Timeline |
| Beasley Broadcast |
| ITV plc |
Beasley Broadcast and ITV Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beasley Broadcast and ITV Plc
The main advantage of trading using opposite Beasley Broadcast and ITV Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beasley Broadcast position performs unexpectedly, ITV Plc 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 ITV Plc will offset losses from the drop in ITV Plc's long position.| Beasley Broadcast vs. ProSiebenSat1 Media AG | Beasley Broadcast vs. RTL Group SA | Beasley Broadcast vs. Mediaco Holding | Beasley Broadcast vs. iHeartMedia |
| ITV Plc vs. ProSiebenSat1 Media AG | ITV Plc vs. RTL Group SA | ITV Plc vs. iHeartMedia | ITV Plc vs. TV Azteca SAB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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