Correlation Between Cumulus Media and QuinStreet

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Can any of the company-specific risk be diversified away by investing in both Cumulus Media and QuinStreet 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 QuinStreet 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 QuinStreet, you can compare the effects of market volatilities on Cumulus Media and QuinStreet 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 QuinStreet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and QuinStreet.

Diversification Opportunities for Cumulus Media and QuinStreet

CumulusQuinStreetDiversified AwayCumulusQuinStreetDiversified Away100%
0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Cumulus and QuinStreet is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet 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 QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of Cumulus Media i.e., Cumulus Media and QuinStreet go up and down completely randomly.

Pair Corralation between Cumulus Media and QuinStreet

Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the QuinStreet. In addition to that, Cumulus Media is 1.44 times more volatile than QuinStreet. It trades about -0.05 of its total potential returns per unit of risk. QuinStreet is currently generating about 0.03 per unit of volatility. If you would invest  1,647  in QuinStreet on November 26, 2024 and sell it today you would earn a total of  338.00  from holding QuinStreet or generate 20.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cumulus Media Class  vs.  QuinStreet

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510152025
JavaScript chart by amCharts 3.21.15CMLS QNST
       Timeline  
Cumulus Media Class 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cumulus Media Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Cumulus Media unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.650.70.750.80.850.90.95
QuinStreet 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days QuinStreet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb202122232425

Cumulus Media and QuinStreet Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.6-12.43-8.26-4.1-0.014.28.5412.8817.2321.57 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15CMLS QNST
       Returns  

Pair Trading with Cumulus Media and QuinStreet

The main advantage of trading using opposite Cumulus Media and QuinStreet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, QuinStreet 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 QuinStreet will offset losses from the drop in QuinStreet's long position.
The idea behind Cumulus Media Class and QuinStreet pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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