Correlation Between Cumulus Media and TVA
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and TVA 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 TVA 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 TVA Group, you can compare the effects of market volatilities on Cumulus Media and TVA 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 TVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and TVA.
Diversification Opportunities for Cumulus Media and TVA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumulus and TVA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and TVA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TVA Group 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 TVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TVA Group has no effect on the direction of Cumulus Media i.e., Cumulus Media and TVA go up and down completely randomly.
Pair Corralation between Cumulus Media and TVA
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the TVA. In addition to that, Cumulus Media is 5.31 times more volatile than TVA Group. It trades about -0.15 of its total potential returns per unit of risk. TVA Group is currently generating about -0.09 per unit of volatility. If you would invest 100.00 in TVA Group on August 25, 2024 and sell it today you would lose (15.00) from holding TVA Group or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. TVA Group
Performance |
| Timeline |
| Cumulus Media Class |
| TVA Group |
Cumulus Media and TVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and TVA
The main advantage of trading using opposite Cumulus Media and TVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, TVA 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 TVA will offset losses from the drop in TVA'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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