Correlation Between Cumulus Media and Mediaco Holding
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Mediaco Holding 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 Mediaco Holding 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 Mediaco Holding, you can compare the effects of market volatilities on Cumulus Media and Mediaco Holding 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 Mediaco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Mediaco Holding.
Diversification Opportunities for Cumulus Media and Mediaco Holding
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cumulus and Mediaco is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding 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 Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of Cumulus Media i.e., Cumulus Media and Mediaco Holding go up and down completely randomly.
Pair Corralation between Cumulus Media and Mediaco Holding
Given the investment horizon of 90 days Cumulus Media Class is expected to generate 1.44 times more return on investment than Mediaco Holding. However, Cumulus Media is 1.44 times more volatile than Mediaco Holding. It trades about 0.2 of its potential returns per unit of risk. Mediaco Holding is currently generating about -0.09 per unit of risk. If you would invest 73.00 in Cumulus Media Class on November 3, 2024 and sell it today you would earn a total of 18.00 from holding Cumulus Media Class or generate 24.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Mediaco Holding
Performance |
| Timeline |
| Cumulus Media Class |
| Mediaco Holding |
Cumulus Media and Mediaco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Mediaco Holding
The main advantage of trading using opposite Cumulus Media and Mediaco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Mediaco Holding 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 Mediaco Holding will offset losses from the drop in Mediaco Holding'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 |
| Mediaco Holding vs. Saga Communications | Mediaco Holding vs. ProSiebenSat1 Media AG | Mediaco Holding vs. Cumulus Media Class | Mediaco Holding vs. Beasley Broadcast 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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