Correlation Between Cumulus Media and PS Business
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and PS Business 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 PS Business 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 PS Business Parks, you can compare the effects of market volatilities on Cumulus Media and PS Business 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 PS Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and PS Business.
Diversification Opportunities for Cumulus Media and PS Business
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumulus and PSBYP is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and PS Business Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS Business Parks 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 PS Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS Business Parks has no effect on the direction of Cumulus Media i.e., Cumulus Media and PS Business go up and down completely randomly.
Pair Corralation between Cumulus Media and PS Business
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the PS Business. In addition to that, Cumulus Media is 1.18 times more volatile than PS Business Parks. It trades about -0.08 of its total potential returns per unit of risk. PS Business Parks is currently generating about 0.03 per unit of volatility. If you would invest 1,288 in PS Business Parks on September 14, 2024 and sell it today you would earn a total of 112.00 from holding PS Business Parks or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.95% |
| Values | Daily Returns |
Cumulus Media Class vs. PS Business Parks
Performance |
| Timeline |
| Cumulus Media Class |
| PS Business Parks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cumulus Media and PS Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and PS Business
The main advantage of trading using opposite Cumulus Media and PS Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, PS Business 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 PS Business will offset losses from the drop in PS Business' 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 |
| PS Business vs. Heritage Distilling Holding | PS Business vs. Cumulus Media Class | PS Business vs. Thai Beverage PCL | PS Business vs. Keurig Dr Pepper |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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