Correlation Between Cumulus Media and 064058AJ9

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Can any of the company-specific risk be diversified away by investing in both Cumulus Media and 064058AJ9 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 064058AJ9 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 BK 37, you can compare the effects of market volatilities on Cumulus Media and 064058AJ9 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 064058AJ9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and 064058AJ9.

Diversification Opportunities for Cumulus Media and 064058AJ9

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Cumulus and 064058AJ9 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and BK 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 064058AJ9 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 064058AJ9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 064058AJ9 has no effect on the direction of Cumulus Media i.e., Cumulus Media and 064058AJ9 go up and down completely randomly.

Pair Corralation between Cumulus Media and 064058AJ9

Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the 064058AJ9. In addition to that, Cumulus Media is 13.81 times more volatile than BK 37. It trades about -0.26 of its total potential returns per unit of risk. BK 37 is currently generating about 0.1 per unit of volatility. If you would invest  9,671  in BK 37 on September 1, 2024 and sell it today you would earn a total of  100.00  from holding BK 37 or generate 1.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cumulus Media Class  vs.  BK 37

 Performance 
       Timeline  
Cumulus Media Class 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
064058AJ9 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in BK 37 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 064058AJ9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Cumulus Media and 064058AJ9 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cumulus Media and 064058AJ9

The main advantage of trading using opposite Cumulus Media and 064058AJ9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, 064058AJ9 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 064058AJ9 will offset losses from the drop in 064058AJ9's long position.
The idea behind Cumulus Media Class and BK 37 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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