Correlation Between Cumulus Media and Urban One
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Urban One 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 Urban One 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 Urban One Class, you can compare the effects of market volatilities on Cumulus Media and Urban One 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 Urban One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Urban One.
Diversification Opportunities for Cumulus Media and Urban One
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cumulus and Urban is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Urban One Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban One Class 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 Urban One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban One Class has no effect on the direction of Cumulus Media i.e., Cumulus Media and Urban One go up and down completely randomly.
Pair Corralation between Cumulus Media and Urban One
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Urban One. In addition to that, Cumulus Media is 1.42 times more volatile than Urban One Class. It trades about -0.21 of its total potential returns per unit of risk. Urban One Class is currently generating about -0.1 per unit of volatility. If you would invest 130.00 in Urban One Class on September 2, 2024 and sell it today you would lose (28.00) from holding Urban One Class or give up 21.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Urban One Class
Performance |
| Timeline |
| Cumulus Media Class |
| Urban One Class |
Cumulus Media and Urban One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Urban One
The main advantage of trading using opposite Cumulus Media and Urban One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, Urban One 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 Urban One will offset losses from the drop in Urban One'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 |
| Urban One vs. Scienjoy Holding Corp | Urban One vs. Saga Communications | Urban One vs. Mediaco Holding | Urban One vs. iHeartMedia Class A |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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