Correlation Between Gray Television and E W
Can any of the company-specific risk be diversified away by investing in both Gray Television and E W 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 Gray Television and E W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gray Television and E W Scripps, you can compare the effects of market volatilities on Gray Television and E W 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 Gray Television with a short position of E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and E W.
Diversification Opportunities for Gray Television and E W
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gray and SSP is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps and Gray Television 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 Gray Television are associated (or correlated) with E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Gray Television i.e., Gray Television and E W go up and down completely randomly.
Pair Corralation between Gray Television and E W
Considering the 90-day investment horizon Gray Television is expected to under-perform the E W. But the stock apears to be less risky and, when comparing its historical volatility, Gray Television is 1.57 times less risky than E W. The stock trades about -0.02 of its potential returns per unit of risk. The E W Scripps is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 258.00 in E W Scripps on August 24, 2024 and sell it today you would lose (61.00) from holding E W Scripps or give up 23.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gray Television vs. E W Scripps
Performance |
| Timeline |
| Gray Television |
| E W Scripps |
Gray Television and E W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gray Television and E W
The main advantage of trading using opposite Gray Television and E W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television position performs unexpectedly, E W 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 E W will offset losses from the drop in E W's long position.| Gray Television vs. E W Scripps | Gray Television vs. Saga Communications | Gray Television vs. iHeartMedia Class A | Gray Television vs. Cumulus Media Class |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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