Correlation Between Cumulus Media and Disney
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Disney 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 Disney 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 Walt Disney, you can compare the effects of market volatilities on Cumulus Media and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Disney.
Diversification Opportunities for Cumulus Media and Disney
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cumulus and Disney is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Cumulus Media i.e., Cumulus Media and Disney go up and down completely randomly.
Pair Corralation between Cumulus Media and Disney
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Disney. In addition to that, Cumulus Media is 2.75 times more volatile than Walt Disney. It trades about -0.07 of its total potential returns per unit of risk. Walt Disney is currently generating about 0.05 per unit of volatility. If you would invest 9,181 in Walt Disney on August 31, 2024 and sell it today you would earn a total of 2,566 from holding Walt Disney or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Walt Disney
Performance |
| Timeline |
| Cumulus Media Class |
| Walt Disney |
Cumulus Media and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Disney
The main advantage of trading using opposite Cumulus Media and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney'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 |
| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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