Correlation Between IHeartMedia and Urban One
Can any of the company-specific risk be diversified away by investing in both IHeartMedia 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 IHeartMedia and Urban One 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 Urban One, you can compare the effects of market volatilities on IHeartMedia 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 IHeartMedia with a short position of Urban One. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and Urban One.
Diversification Opportunities for IHeartMedia and Urban One
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IHeartMedia and Urban is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia Class A and Urban One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban One 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 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 IHeartMedia i.e., IHeartMedia and Urban One go up and down completely randomly.
Pair Corralation between IHeartMedia and Urban One
Given the investment horizon of 90 days IHeartMedia is expected to generate 1.26 times less return on investment than Urban One. In addition to that, IHeartMedia is 1.09 times more volatile than Urban One. It trades about 0.13 of its total potential returns per unit of risk. Urban One is currently generating about 0.17 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iHeartMedia Class A vs. Urban One
Performance |
| Timeline |
| iHeartMedia Class |
| Urban One |
IHeartMedia and Urban One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHeartMedia and Urban One
The main advantage of trading using opposite IHeartMedia and Urban One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHeartMedia 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.| IHeartMedia vs. Beasley Broadcast Group | IHeartMedia vs. Saga Communications | IHeartMedia vs. E W Scripps | IHeartMedia vs. Gray Television |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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