Correlation Between Cumulus Media and Cable One
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Cable One 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 Cumulus Media and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and Cable One, you can compare the effects of market volatilities on Cumulus Media and Cable One 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 Cumulus Media with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Cable One.
Diversification Opportunities for Cumulus Media and Cable One
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cumulus and Cable is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Cumulus Media 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 Cumulus Media Class are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Cumulus Media i.e., Cumulus Media and Cable One go up and down completely randomly.
Pair Corralation between Cumulus Media and Cable One
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Cable One. In addition to that, Cumulus Media is 1.65 times more volatile than Cable One. It trades about -0.14 of its total potential returns per unit of risk. Cable One is currently generating about -0.02 per unit of volatility. If you would invest 52,001 in Cable One on August 26, 2024 and sell it today you would lose (10,346) from holding Cable One or give up 19.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Cable One
Performance |
| Timeline |
| Cumulus Media Class |
| Cable One |
Cumulus Media and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Cable One
The main advantage of trading using opposite Cumulus Media and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
| Cable One vs. Liberty Global PLC | Cable One vs. Liberty Global PLC | Cable One vs. Liberty Broadband Srs | Cable One vs. Shenandoah Telecommunications Co |
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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