Correlation Between Gray Television and Urban One
Can any of the company-specific risk be diversified away by investing in both Gray Television 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 Gray Television and Urban One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gray Television and Urban One, you can compare the effects of market volatilities on Gray Television 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 Gray Television with a short position of Urban One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and Urban One.
Diversification Opportunities for Gray Television and Urban One
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gray and Urban is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and Urban One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban One 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 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 has no effect on the direction of Gray Television i.e., Gray Television and Urban One go up and down completely randomly.
Pair Corralation between Gray Television and Urban One
Considering the 90-day investment horizon Gray Television is expected to under-perform the Urban One. But the stock apears to be less risky and, when comparing its historical volatility, Gray Television is 1.05 times less risky than Urban One. The stock trades about -0.17 of its potential returns per unit of risk. The Urban One is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Urban One on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Urban One or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gray Television vs. Urban One
Performance |
| Timeline |
| Gray Television |
| Urban One |
Gray Television and Urban One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gray Television and Urban One
The main advantage of trading using opposite Gray Television and Urban One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television 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.| Gray Television vs. E W Scripps | Gray Television vs. Saga Communications | Gray Television vs. iHeartMedia Class A | Gray Television vs. Cumulus Media Class |
| Urban One vs. TVA Group | Urban One vs. Saga Communications | Urban One vs. E W Scripps | Urban One 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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