Correlation Between Cumulus Media and Stagwell
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Cumulus Media and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Stagwell.
Diversification Opportunities for Cumulus Media and Stagwell
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumulus and Stagwell is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Cumulus Media i.e., Cumulus Media and Stagwell go up and down completely randomly.
Pair Corralation between Cumulus Media and Stagwell
Given the investment horizon of 90 days Cumulus Media Class is expected to generate 2.85 times more return on investment than Stagwell. However, Cumulus Media is 2.85 times more volatile than Stagwell. It trades about 0.06 of its potential returns per unit of risk. Stagwell is currently generating about 0.07 per unit of risk. If you would invest 89.00 in Cumulus Media Class on November 9, 2024 and sell it today you would earn a total of 3.00 from holding Cumulus Media Class or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Stagwell
Performance |
| Timeline |
| Cumulus Media Class |
| Stagwell |
Cumulus Media and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Stagwell
The main advantage of trading using opposite Cumulus Media and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell'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 |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
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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