Correlation Between IHeartMedia and Gray Television
Can any of the company-specific risk be diversified away by investing in both IHeartMedia and Gray Television 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 IHeartMedia and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iHeartMedia Class A and Gray Television, you can compare the effects of market volatilities on IHeartMedia and Gray Television 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 IHeartMedia with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and Gray Television.
Diversification Opportunities for IHeartMedia and Gray Television
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between IHeartMedia and Gray is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia Class A and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and IHeartMedia 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 iHeartMedia Class A are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of IHeartMedia i.e., IHeartMedia and Gray Television go up and down completely randomly.
Pair Corralation between IHeartMedia and Gray Television
Given the investment horizon of 90 days iHeartMedia Class A is expected to generate 0.67 times more return on investment than Gray Television. However, iHeartMedia Class A is 1.49 times less risky than Gray Television. It trades about 0.24 of its potential returns per unit of risk. Gray Television is currently generating about 0.05 per unit of risk. If you would invest 170.00 in iHeartMedia Class A on August 24, 2024 and sell it today you would earn a total of 75.00 from holding iHeartMedia Class A or generate 44.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iHeartMedia Class A vs. Gray Television
Performance |
| Timeline |
| iHeartMedia Class |
| Gray Television |
IHeartMedia and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHeartMedia and Gray Television
The main advantage of trading using opposite IHeartMedia and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHeartMedia position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| IHeartMedia vs. Beasley Broadcast Group | IHeartMedia vs. Saga Communications | IHeartMedia vs. E W Scripps | IHeartMedia vs. Gray Television |
| Gray Television vs. Haverty Furniture Companies | Gray Television vs. Liberty Global PLC | Gray Television vs. Gray Television | Gray Television vs. Greif Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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