Correlation Between Fuji Media and Nexstar Media
Can any of the company-specific risk be diversified away by investing in both Fuji Media and Nexstar Media 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 Fuji Media and Nexstar Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and Nexstar Media Group, you can compare the effects of market volatilities on Fuji Media and Nexstar Media 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 Fuji Media with a short position of Nexstar Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and Nexstar Media.
Diversification Opportunities for Fuji Media and Nexstar Media
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fuji and Nexstar is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and Nexstar Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Media Group and Fuji 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 Fuji Media Holdings are associated (or correlated) with Nexstar Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Media Group has no effect on the direction of Fuji Media i.e., Fuji Media and Nexstar Media go up and down completely randomly.
Pair Corralation between Fuji Media and Nexstar Media
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 1.83 times more return on investment than Nexstar Media. However, Fuji Media is 1.83 times more volatile than Nexstar Media Group. It trades about 0.26 of its potential returns per unit of risk. Nexstar Media Group is currently generating about -0.15 per unit of risk. If you would invest 1,050 in Fuji Media Holdings on October 25, 2024 and sell it today you would earn a total of 140.00 from holding Fuji Media Holdings or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. Nexstar Media Group
Performance |
| Timeline |
| Fuji Media Holdings |
| Nexstar Media Group |
Fuji Media and Nexstar Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and Nexstar Media
The main advantage of trading using opposite Fuji Media and Nexstar Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, Nexstar Media 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 Nexstar Media will offset losses from the drop in Nexstar Media's long position.The idea behind Fuji Media Holdings and Nexstar Media Group 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.| Nexstar Media vs. Micron Technology | Nexstar Media vs. MUTUIONLINE | Nexstar Media vs. ZhongAn Online P | Nexstar Media vs. Entravision Communications |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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